Abstract:
The study was conducted to assess the effect of compensation on employee
performance after controlling for the effect of perceived external equity. It was
conducted in Holy Family Nursing and Midwifery Training College in the
Brong Ahafo Region of Ghana. Explanatory research design was adopted in
this study with much reliance on quantitative research approach. The study
adopted census as the sampling techniques since the population size was
relatively smaller (84 permanent staff) and highly accessible. Structured
questionnaire was used to collect the primary data. The primary data were
collected through self-administration. Statistical Package for Social Sciences
was configured with the SPSS Process Macro Package for the primary data
processing. Statistical technique such as multiple regression, Perason product
moment correlation, independent sample t-test (parametric techniques) and
descriptive statistics such as mean, standard deviation, frequency and
percentage were used to ascertain the findings relating to the specific
objectives and hypothesis. The analysis data revealed that, there is a moderate
positive correlation between compensation and employee performance.
However, perceived external equity failed to mediate the predictive
relationship between compensation and employee performance. Based on the
findings it was recommended to management to pay more attention to their
performance-based pay, staff involvement in compensation setting and salary
audits to promote efficient employee performance.
