CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

In this section, review of related previous literature was carried out. This section reviews the

literature in the following aspects: Conceptual Literature Review, Theoretical Expository

Literature Review, and Review of Empirical Literature.

2.1 Conceptual Review

In this section of the research, we shall examine the concepts of employee performance

compensation and benefits.

2.1.1 Employee Performance

Employee performance refers to the conduct of the duties of the organization with regard to the

policies and the rules of the firm and it is one of the main important aspects of the organization

to attain the organizational goals (Jemima, 2021). When the goals of the organization are met

then the organization can continue in the operations of the firm but in case the goals are not met

the firm can easily close down. Employee performance is normally compensated through salaries

and wages or any other form of reward which is lawful like the benefits (Rugut & Kipkorir,

2022). Employee performance is also referred to as the art of working towards a common goal

for monetary benefit. The art of working is guided by the general principles and the laid down

rules, which can be changed from time to time. Employees are motivated by monetary

compensation or any other benefits which makes them work harder to earn more (Noble, 2019).

Employee performance is the successful completion of task, responsibilities or assignment by

selected employee or group of employees based on a set of performance objective and indicator

of efficiency and effective utilization of available resources (Pradhan & Jena, 2017). Besides,

employee performance can be seen as an activity in which the individual can achieved the task
assigned to them successfully, subject to the usual constraint of the reasonable use of available

resources (Omuya, 2018). Employee performance is the achievement of set of standards in terms

of accuracy and completeness over a specified period of time (Urbancová & Šnýdrová, 2017).

Employee performance will exchange the fate of the organization. With the hard work and good

performance in increase the productivity, indirectly the employee is increasing the profit

(Onuorah et al., 2019).

2.1.2 Compensation and Benefits

Compensation may be defined as money received for the performance of work plus many kinds

of benefits and services that organizations provide their employee. Compensation is recompense,

reward, wage or salary given by an organization to persons or a group of persons in return to a

work done, services rendered, or a contribution made towards the accomplishment of

organizational goals. Wage, dearness allowance, bonus and other allowance are examples of

monetary compensation, while good accommodation, children education, transport facilities,

subsidized ration of essential commodities, etc. come under non-monetary compensation. In

short, wage paid to collar workers or salaries paid to white collar employee can be classified as

compensation (Noble (2019)

The impact of compensation and benefits on employee performance and organizational

effectiveness depends on the existing compensation and performance management programs at

an individual organization. Typically, most employees respond to increases in pay and benefits

with a positive and more productive attitude. However, the opposite is true as well. Sometimes,

employees only notice rewards of a salary increase the day the increase is communicated to

them, and the day they receive the first paycheck that includes the salary increase (Ushie et al.,

2021).
In the long run, the effects of compensation and benefits diminish as employees begin to feel a

sense of loyalty and organizational commitment (Agunbiade et al., 2020). When employees

begin to feel they are an indispensable part of the organization, they often become dissatisfied

with their compensation and benefits (Okoye (2022). Finally, when employees feel they are a

superior part of an organization, they typically believe that the organization owes them much

more than what they are already receiving. At this point, compensation is simply the glue which

holds many dissatisfied employees in place (Rugut and Kipkorir (2022).

Compensation is one of the elements of reward that is provided by company and benefit is part

of the compensation, however it will distinguish by the types of rewards that will be given

(Odunlami & Matthew, 2019). Usually, the compensation will be given as the monetary rewards

while the benefits will be given as non-monetary reward and these two rewards also known as

the direct compensation and indirect compensation (Afriyie et al., 2020). Employee

compensation can be seen as all form of financial and significant benefit received by employees

as part of the employment relationship and direct compensation can be like salary or wages while

indirect compensation can be as welfare support facility (Setiyanto & Natalia, 2017). However,

the benefits such as pensions consist of sharing worker compensation in the public sector are

better (Ushie et al., 2021).

2.1.3 Training and Development

Aliku et al. (2020) states that development is an unfolding process that enables people to

progress from a present state of understanding and capability to a future state in which higher-

level skills, knowledge and competencies are required. It takes the form of learning activities that

prepare people to exercise wider or increased responsibilities. Moh (2019) asserts that training is

an important element in producing the human capital. It provides employees with the skills,
abilities and knowledge required by the post. The objective of training is to achieve a change in

the behaviour of those trained (Afriyie et al., 2020). This means that the trainees shall acquire

new manipulative skills, technical knowledge and skills on the job in such a way as to aid in the

achievement of organizational goals (Md-Asad & Mohammad, 2019).

Training helps to reconcile the gap between what should happen and what is happening between

desired targets or standards and actual levels of work performance (Omuya, 2018). Training need

is any shortfall in employee performance, or potential performance which can be remediated by

appropriate training (Jemima (2021). There are many ways of overcoming deficiencies in human

performance at work, and training is one of them. Employee performance may be seen as the

result of congruence between training and development and organizational goal (Seidu et al.,

2020)

2.1.4 Superior Support

Supervisors are the key level of management and to enhance the performance of the employees,

there is a need to create good relationship between employee and supervisor as strong

relationship between the supervisor and employee is the key to job satisfaction in employees

which in turns improves the quality of performance (Hanaysha, 2019). Both need to show their

complete commitment with each other to gain optimum performance. Also, when supervisor

have interacting skills, they can coordinate well and help employees developing skills during

training program (Raniasari, 2021). Moh (2019) argues that positive relationship between

employee and supervisor creates positive impact on the performance of employee. Further, it

shows that when supervisor show committed it persuades employee to show their commitment.

Also, this relationship nurtures the behavior of employee as they start sharing words with each

other’s, regular feedback provided, employee been rewarded (Md-Asad & Mohammad, 2019).
The main aim of the supervisory position is to make sure health care staff provides optimum care

to the patient. This practice not only benefits health facilities and patient but also help individual

growth (Seidu et al., 2020). Without support from supervisors, employees may feel stressful at

work, and as a result may feel dissatisfied with their jobs. This is especially valid for employees

in developing countries, who are generally not as well-educated as those in developed countries.

Theoretically, a moderator affects the direction or strength of the relation between an

independent (or a predictor) variable and a dependent variable, whereas a mediator accounts (to

an extent) for the relationship between the predictor and the dependent variable. In other words,

questions involving moderators address when or for whom a variable most strongly predicts or

causes an outcome variable; whereas mediators establish how or why one variable predicts or

causes an outcome variable (Jemima, 2021).

2.1.5 Work Incentives

Work incentive for increasing employee performance is often thought to be based on salary and

promotion and a motivating work environment must be the one in which employees are treated

fairly (Seidu et al., 2020). No matter what level of input a particular worker has in relation to the

business processes as a whole, it is essential for a manager to give each employee a sense of

playing a dynamic, integral role in something much larger (Parsa, 2017). Indeed, engendering

loyalty is a key element of motivating workers and thereby increasing the overall productivity

and employee performance. Therefore, the organization determines what motivates its employees

and sets up formal and informal structures for rewarding them as the working environment factor

which enhances performance (Enyioko & Ikoro, 2018).

The term incentives, consists of rewards and recognition are used interchangeably in the

organization setting and there is no broader difference among them and however, the main
category is the incentives. Abdul-Jaleel and Millan (2017) describes incentives as any source or

medium that encourages an employee or group of employees to perform better and to exert more

effort beyond expectations. Basically, incentives are divided into two main groups: Financial

incentives and non-financial. Financial incentives include direct payment of cash while non-

financial incentives may be in the form of promotion of employee’s, flexible time, autonomy and

involvement in decision making. their end of the employment contract, that is, compensating

employees for their efforts (Hanaysha, 2019). In general, an incentive scheme (payment or

programme) is any compensation that has been designed to recognize some specific

accomplishment on the part of an employee. It is expected that the prospect of the incentive

payment will trigger the desired employee’s productivity behaviors in the employee (Noah &

Steve, 2020).

Incentive schemes relate compensation to productivity and the primary purpose of an incentive

scheme is to encourage greater productivity from individuals and work groups. In addition to

motivating employees to increase their level of productivity, incentive schemes may reduce

turnover among good performers or productive workers. Incentive schemes are also cost

effective because of savings that often resulted from productivity improvements also, people

enjoy activities or tasks more when they receive a reward (Onuorah et al., 2019).

2.2 Theoretical Review

This study takes a multi-theoretical approach. Particularly, the underpinning theories of this

study are the reinforcement theory, Victor Vroom’s Expectancy Theory and the goal setting

theory.

2.2.1 Reinforcement Theory

Reinforcement theory, as developed by Hull (2008), suggests that successes in achieving goals

and rewards act as positive incentives and reinforce the successful behaviour, which is repeated

the next time a similar need emerges. Insufficient attention is paid in motivation theories to the

influence of expectations. No indication is given of any means of distinguishing in advance the

class of outcomes, which would strengthen responses and those which would weaken them. It is

therefore important to understand how the law of effect’ operates when managing a rewarding

performance at work place (Mwita, 2008). Behaviorist B.F. Skinner, (1953) determined the

reinforcement hypothesis, one in each of the most seasoned theories of motivation, as how to

explain laborer behavior and why we have a propensity to do what we have a tendency to do.

The theory is moreover alluded to as behaviorism, or conditioning. The theory states that an

individual’s behavior could be an introduce of its results (Muthoni & Mwangi, 2012).

Reinforcement theory outlines that a reaction taken after by a gift is extra possible to be futuristic

and repeat itself and the suggestion for remuneration administration states that the top labore

execution followed by money related remunerate can make future high execution extra probably

(Kimani et al., 2017). By an equivalent token, high enactment not taken after by a gift can make

it less likely inside the future. The theory emphasizes the significance of an individual really

encountering the remunerate (Uwizeye & Muryungi, 2017).

2.2.2 Victor Vroom’s Expectancy Theory

One of the commonest process theories of motivation is that developed by Victor Vroom

expectancy theory. In the words of Scholtz et al. (2016), the expectancy theory defined the

diversities within the workplace as it relates to thoughts, concerns, and opinions of workers and

how it impacts their attitude and behavior on the job. Vroom’s expectancy theory is built around

employees’ definitive aspirations and hopes. Employees within an organizational setting are

mostly intentional about their actions and inaction based on the available information to them
and motivational factors, as such, they are committed to efforts they believe will promote their

ultimate interest (El-Achi and Sleilati; 2016). The theory believes that efforts or work are

positively induced in the workforce if members of the workforce prefer achieving that outcome

than not, as such workers prefer to evade negatively valent outcomes. Valence in this sense is the

function of the various sources of inspiration guiding employees and their common aspirations.

The crux of Vroom’s expectancy theory is that the decision of what outcome should be in the

workplace should have a correlational relationship with the specific behaviors, attitudes, and

performance that encourages the management in the workplace.

The theory has been castigated on two major grounds which are its simplicity and its misleading

assumptions. For instance, Guest (2012) argued that the assumption that if management offers an

incentive, then workers will automatically act to get the rewards. Such assumption is often

misleading and has generated the creation of disincentives for employees. This theory

specifically focuses on the personal evaluations of a workforce and their workplace. It assesses

the activities of workers based on their hopes and aspirations (Purvis, Zagenczyk & McCray,

2015). Schedlitzki & Edwards (2014) linked the path-goal theory to the assumptions of the

expectancy theory stating that workers have a tendency to perform effectively if they believe that

they have the capability of fulfilling the assignment, achieving the expected outcome and that

this expected outcome is of utmost value to them.

The theory implies that workers will only be willing to put their energy to work if the outcome of

both concerns are positive (George & Jones, 2012). This means that the positivity of an outcome

is assumed to be associated with a specific action, as such the willingness of a workforce to

perform is largely dependent on how positively inclined they view the outcome (Vroom, 1964;
Lin, 2007). The theory outlines three key elements that determine a worker’s level of motivation:

valence, instrumentality, and expectancy (Estes & Polnick, 2012).

2.2.3 Goal Theory

Goal theory originated from the work of Locke and Latham, and it is an offshoot of the once

popular management by the objectives approach. The idea behind the goal theory is because it is

believed that employees have the ability and should be able to set achievable goals and

objectives (Osabiya 2015, and Hemakumara 2020). The basic premise of this theory is that

people’s goals or objectives play an important role in determining behavior because ‘goals guide

people response and action by directing work behavior and performance, and lead to certain

feedback’. One of the assumptions of goals motivational theory is that goal setting is more of

motivation on its own rather than just a process. As also noted by Stanley (2012), individuals

with specific and difficult goals/objectives have proven to be more contributory toward

achieving organizational goals and objectives and in the process have higher performance

ratings.

The effects of goals theory have practical implications for motivation and performance, the

stipulation is that specific performance goal/objectives should be identified, set and staff

encouraged to buy into such goals to achieve high-performance levels. Another implication is

that the feedback process should be timely in the organization. Goal theory has also been

criticized on various points, but most importantly, Lin (2007) asserted that there are instances

when goal is only part of the many variables that influence performance. However, the focus on

goals most often leads to neglect of the other variables.

2.3 Conceptual Framework

This illustrates the independent variable (Compensation and Benefits) which was measured with

training and development, supervisor support and workplace incentives which is against the

dependent variable (Employee Performance). Hence, it is illustrated below.

Training and
Development

Employees
Compensation and
Supervisor Support Performance
Benefits

Workplace Incentives

Figure 2.1: Conceptual Framework of the Study

(Researchers Adaptation, 2023)

2.4 Empirical Reviews

Ojeleye (2017) explored the impact of remuneration on employees' performance. Eighty-three

employees of Abdul Gusau polytechnic and state college of education both in Zamfara state were

handed structured questionnaire to solicit data on remuneration and performance. The dependent

variable is employees' performance while the independent variable is remuneration salary/wages,

bonus/incentives). Pearson correlation and multiple regression model were used to analyzed the

data using SPSS 22.0 and E-views 9.0. The finding suggested that the is a strong and positive

relationship between remuneration and employees' performance and that salary/wage and

bonus/incentives also serve as a form of motivation to the employees. The study recommends

Prompt payment of salaries, wages and all entitlements and encouragement of employees'

participation in pay determination.

Abdul-Jaleel & Millan (2017) examine the effect of compensation systems on the work

performance of employees (junior staff) of the University of Cape Coast (UCC), Ghana. Th

sample size for the study was 346. Stratified random sampling technique was used to select the
junior staff. Also, 24 administrators were selected purposively to help collect data from the

respondents. Questionnaire and an annual assessment form were the instruments used in

collecting data. Both descriptive and inferential statistics were used in analysing the data.

Findings from the study show that the junior staff have positive view on the university’s

compensation packages as a whole. However, junior staffs’ view on the university’s

compensation packages does not influence employees’ work performance directly. It does so

only if it boosts their level of satisfaction which in turn boosts their commitment to the university

and in the long run increases their work performance. It was recommended to management of the

university to ensure a congenial environment and improved its compensation packages,

especially non-financial, to encourage and motivate staff to be committed to the university which

will lead to a significant increase in the work performance of the staff.

Omuya, (2018) soughed to evaluate the influence of compensation and reward on employees’

performance in public universities in Kenya. Descriptive survey research design was employed

which allows the researcher achieve greater control of the study and to improve the validity of

the study by examining the research problem. The target population included all the HR workers

in selected public universities with a sample of 125 HR employees. Structured questionnaire was

used as the main primary data collection instrument while secondary data was obtained from

literature developed by scholars. The instrument was tested for validity and reliability before it

was used for data collection. The data collected was filtered, coded and analysed using SPSS. A

regression model was used to establish the relevant relationships. The findings of the study

showed that most of the respondents were not sure that recruitment and selection as an HRM

practice has contributed to employee performance in public universities in Kenya. The findings

also showed that most of the respondents agreed or strongly agreed that employee training has
contributed to employee performance in public universities in Kenya. It was also established that

most respondents strongly agreed or agreed that good compensation and reward have contributed

to employee performance. The study recommends that public universities should adhere all the

guidelines stipulated in the HRM Practices to enhance employee performance and productivity.

Enyioko and Ikoro (2018) The study examined the effect of compensation plan on employee

performance in telecommunication industry in Nigeria with a case study of MTN Nigeria, Abia

State. The essence of the study is to investigate whether compensation plan of the organization

can to an extent determine the performance of employee in the organization. The methodology

that was used for the study was survey design, primary and secondary sources of data were

adopted, with a sample size of 133 which was selected among managers and other senior staff of

MTN. The study revealed that if employees are well compensated by way of allowances,

commission, salaries and other fringe benefits, they will increase their performance and finally

recommend increase in allowance, commissions and salaries for increase in productivity.

Md-Asad and Mohammad (2019) main purpose is to provide a research framework that

examines relationships among employees, compensation package and financial performance of

an organization. This research develops valid and reliable instruments to measure employee

performance, compensation package and financial performance. Principal Component Analysis

and Z-test model were used to identify the causal relationship with dependent and independent

variables. KMO and Bartlett's Test, Cronbach's Alpha were used to check the validity and

reliability of the research framework. And Z-test modeling is employed to test hypotheses

following the research framework. A sample of 80 respondents from 20 different private

organizations around Dhaka City were chosen purposively for this research. The results of this

research showed that compensation package has a positive influence on employee performance.
And for this level of performance would be increased among employees which play a vital role

in enhancing the financial performance of the organization.

Moh (2019) made used of quantitative approach with multiple linear regression analysis. The

total number of employees is 50 people, so the technical sample used is the census. Furthermore,

the research was carried out by testing the stages of analysis which included descriptive analysis

of the questionnaire, validity test, reliability test, classic assumption test, linear regression test,

correlation coefficient test and test coefficient of determination. The results of the regression

analysis show that the compensation has a positive and significant effect on the performance of

Imperial Club Golf employees with a regression coefficient of 0,618 and Tcount of 7,156.

Onuorah et al. (2019) examined the effect of compensation management and employee

performance in Nigeria organization. The study aim at investigating the influence of

performance based compensation, competency-based-compensation and equity based-

compensation on employee performance. Relevant conceptual, theoretical and empirical

literatures were reviewed. The study adopt descriptive survey research design. In analyzing the

data for the null hypotheses, Z-test was be used to test the hypotheses at 0.05 level of

significance. Equity based compensation has no negative significance effect on employee

performance in Nigeria organization. Competency based compensation has no negative

significance effect on employee performance in Nigeria organization. Performance based

compensation has no negative significance effect on employee performance in Nigeria

organization. Therefore the study conclude that compensation management has significance

effect on employee performance in Nigeria organization. The study recommends that every

organization should make equity-based compensation as compulsory policy since equity-based

compensation are used more extensively in firms for ensuring maximum performance.
Seidu et al. (2020) explored the impact of compensation taking into consideration elements such

as salary, rewards, incentives, and indirect compensations impact on employee's performance in

AngloGold Ashanti Obuasi, Ghana. Using a simple random sampling approach, a questionnaire

was administered to 240 employees in the organization with 222 completing them and same

adopted for the study. The study used the SPSS version 26 to process the data after all errors

were corrected and data coded. Descriptive analysis and multiple regression analysis were

employed to analyze and give meanings to the output. The results indicate that salary, rewards,

incentives, and indirect compensations have a positive and significant impact on employee

performance. The study hence recommends that the organization should constantly enhance their

compensation schemes in order to consistently improve the performance of their employees.

Afriyie et al. (2020) investigated the effect of compensation on employee’s performance Accra

Technical University: Ghana. Descriptive survey design was used for the investigation. A simple

random sampling technique was used to sample 40 respondents out of a total population of 57

Administrators of which 35 responded to the Twenty-item questionnaire. Frequency tables were

used to present the responses. The main conclusions were that administrators were not attracted

by the monetary aspect of compensation but rather management sensitivity to their needs. We

also find that; housing loan and accommodation are the most crucial needs. The recommendation

was that Management should create another form of set-off package alongside with the one in

the condition of service to encourage workers to put up their best.

Aliku et al. (2020) examined the effect of Compensation management on employees

performance in the manufacturing industry. Specifically, the study objectively ascertained

Management compensation measures in the areas of; Salary (SLY) and Benefits Programmes

(BP) and how they affect Employees Performance in the Manufacturing Industry. Descriptive
survey research design was adopted most appropriately due to the descriptive and inferential

statistics used in processing the collected data. The sample size is of 73 respondents was

determined for the study using Census statistical application on small elements. The study used a

5 point Likert Scale for the closed-ended questions to draw responses from the respondents. Data

analyzed. First is the data presentation which comprises of the descriptive analysis of

respondents profile using simple weighted percentage, secondly, the descriptive statistics of data

gotten from the questionnaire using minimum, maximum, mean and standard deviations for

interpretations. The Pearson correlation analysis was also be used as a basis of testing

hypotheses. The findings revealed that all the independent variables (Salary (SLY) and Benefits

Programmes (BP), have a significant relationship with Employees Performance in the

Manufacturing Industry. The study recommended that the company should continue providing

security benefits to all employees, their position notwithstanding as it will positively influence

employees’ performance.

Oboreh and Arukaroha, (2021) examined the effect of reward on organizational performance in

universities in Edo State. The study aimed to determine the effect of salary increase, cash bonus,

recognition, promotion and career development on organizational performance. Relevant

conceptual, theoretical and empirical literatures were reviewed. This research work is anchored

on equity theory. Survey research design was employed in the study. Six universities comprising

of two private universities, two state-owned universities and two federal universities were

sampled for the study. The population consists of 3974 academic staff of the selected

universities. A sample size of 365 was determined using Taro Yamene formula. Questionnaire

was employed as the major instrument of data collection. The data generated were analyzed

using frequency tables, percentages and multiple regression analysis. The study found that salary
increase, cash bonus, promotion, recognition and career development have significant effect on

organizational performance. The study concludes that reward has a significant positive effect on

organizational performance in the sampled universities in Edo State. Based on the conclusion, it

was recommended that universities management should ensure constant review of their reward

policy to reflect current realities so as to motivate their employee to be committed to improved

performance among others

Raniasari (2021) determine the effect of compensation, work environment and communication

on employee performance with a case study at UD. Djaya Electricity and Materials (UD. DEM).

The sampling method was purposive sampling technique because UD. DEM selected as a

company that sells and distribute building materials and electrical appliance products for

wholesale and retail, already has 10 branches in Bekasi and 50 employees. Data collection was

conducted through observation, distributing questionnaires and literature study. The analysis

method used in this research is validity, reliability, classical assumption, multiple linear analysis

and hypothesis test. The results showed that compensation and work environment partially had a

positive effect on employee performance, while communication partially had no effect on

employee performance.

Jemima (2021) investigated the effect of compensation and reward system on employee

performance at Kenya Revenue Authority. The specific objectives were; to establish the effects

of salary, promotion, recognition, fringe benefits and the extent to which the four elements of

compensation had affected employee performance at Kenya Revenue Authority. A number of

theories informed the study. These were expectancy-reinforcement theory, equity theory and

agency theory. The study adopted a descriptive survey research design, which sought to describe

the prevailing state of affairs. Stratified random sampling technique was employed to select a
sample of 120 respondents from a target population of 1200 employees of Kenya Revenue

Authority Headquarters. A mixed method of quantitative/qualitative approach was used. The

study used both primary and secondary data. Primary data was collected using questionnaires

and observation of the behavior of employees with respect to the phenomenon under

investigation. A multiple linear regression model was used to test the significance of the

influence of each independent variable on the dependent variable. Pearson’s bivariate correlation

analysis revealed the extent to which the various elements of compensation (salary, promotion,

fringe benefits and recognition) influenced the performance of employees at Kenya Revenue

Authority. Descriptive statistics revealed that KRA has not met its revenue targets as indicated

by 79% of the respondents. Additionally, 90% of the respondents indicated that motivation is a

critical determinant of employee performance at KRA. The findings lead to the conclusion that

Kenya Revenue Authority has put in place a fair compensation and reward system although the

system has not inspired high employee performance to the fullest.

Ogbogu and Sadamoro (2022) looked at the relationship between compensation policy and

employee performance in Ado Local Government Area in Ekiti State. The study's goals were to

examine the impact of promotion on employee performance, evaluate the impact of salary

increases on employee performance, and analyze the extent to which recognition influences

employee performance. When it came to safety management, a questionnaire was employed to

collect data from the employees. The study's population and sample size were 352 people.

Various sampling approaches were used. Because of the nature of the task, the study employed a

survey research approach. The study included both primary and secondary data sources. The

collected questionnaire was analyzed using correlation analysis. The study discovered that

promotion had a considerable impact on employee performance based on the studies conducted.
According to the survey, dedicated employees should have their salaries increased once in a

while to indicate that their efforts are appreciated

Rugut and Kipkorir (2022) assessed the effect of incentives on the performance of multinational

tea companies in Kericho County. Expectancy theory was adopted. Descriptive research design

was appropriate for the study which targeted 99 senior, middle and lower manager of James

Finlays Kenya Limited, George Williamson Limited and Unilever Limited in Kericho County. A

census of 99 managers was used as respondent. Data was obtained using questionnaires. The data

was analyzed using descriptive especially the mean and standard deviation. While inferential

statistics was utilized to test significance. The analyzed data was presented using percentages and

frequency distribution tables and chart. The study result indicated that there was significant

effect of monetary pay, allowance, fringe benefit and incentive on firm productivity. The study

concluded that compensation practices significantly affected on firm productivity (p<0.05). The

study recommended that other incentive should be explored based on employee performance

which results in firm productivity.

Okoye (2022) examined compensation and organizational performance, a study of Muoka foam

in Lagos state. The objectives are to assess the effect of salary increase on organizational

performance of Muoka foam. To determine the effect of promotion on organizational

performance of Muoka foam. To investigate the degree to which recognition affects

organizational performance of Muoka foam. Questionnaire was used to collect data from the

staff as it concerns safety management. The population and sample size of the study was 875.

Purposive sampling techniques were adopted. . The study used survey research design due to the

nature of the work. Primary and secondary sources of data were used in the study. Correlation

analysis was used to analyze the collection questionnaire. From the analyses tested, the study
found out that, salary increase has significant effect on organizational performance. Promotion

has significant effect on organizational performance. Recognition has significant positive effect

on organizational performance. The study recommended that once in a time salary should be

increase for the committed staff to encourage showing that their efforts are being recognize

However it will motivate the other workers to put more efforts. Organizations are encouraged to

enshrine promotion in their organizations law and be serious with it, this will also encourage

staff to work tirelessly to be promoted. Recognition is also an effective tool for organizational

performance and should be taken serious in all ramification as well should be use to encourage

staffs

2.4 Research Gap

An unresolved research gap was found in the literature that most of the previous studies on the

relationship between compensation and benefit on employee performance were based only on

either the manufacturing sector (Agiomirgianakis et al. 2016; Prakash et al. 2017) or the service

sector (Parast & Fini, 2019; Smith & Reece, 2019). No evidence was found concerning the

educational sector. Therefore, this study would be a bridge to fill this said literature gap, since

this study examines the relationship compensation, benefit and employee performance.