Compensation Practices and Employee Performance of Some Selected Small and Medium Scale Enterprises in Sekondi -Takoradi Metropolis

Abstract

The main aim of the study was to assess the form of compensation practices on employee performance amongst SMEs in Sekondi -Takoradi Metropolis. The research approach chosen for this study was quantitative and both descriptive research and explanatory research design were adopted for this study. Out of 1845 employees, a sample size of 320 was randomly sampled. A self-administered questionnaire was used in the data collection. Descriptive statistics such as frequencies and percentages and regression analysis were used to analyse the objectives. The study found that both direct and indirect forms of compensation are given to workers with SMEs in the Secondi-Takoradi Metropolis. Direct compensation given to employees included bonuses, commissions, wages, salaries and advanced pay. While indirect compensation included subsidised food, medical aid, social security, fringe benefits, insurance benefits and staff meals. Again, the study found that the workers perform well, and maintain professional working relationships. It was found that, both direct and indirect compensation have a strong significant influence on SME workers’ performance. The study concluded that both direct and indirect compensation had a strong influence on SME workers’ performance in within the Secondi-Takoradi Metropolis. The study recommended that, owners and managers of the SMEs should ensure that they continuously provide improved compensation packages that are satisfying to their workers even though they were found to have a low influence on performance compare to indirect compensation packages.