Test of Hypotheses Spearman Rank Order Correlation Coefficient was used with the aid of SPSS Version 20.0.

Test of Hypotheses

Spearman Rank Order Correlation Coefficient was used with the aid of SPSS Version 20.0.

HO1: Direct compensation does not significantly associate with employee performance in the Rivers State Board of Internal Revenue Service.

Table 3: Correlations

Direct compen-

sation

Employee perfor- mance

Spear- man’s rho

Direct compen- sation

Correlation Coefficient

1.000 .822**

Sig. (2-tailed)

. .000

N 32 32 Employee perfor- mance

Correlation Coefficient

.822** 1.000

Sig. (2-tailed)

.000 .

N 32 32

** Correlation is significant at the 0.05 level (2-tailed)

Based on Mehran et al. (2014) benchmark for rejecting and accepting null hypotheses using the SPSS the null hypothesis is hereby rejected on the basis that p-values (0.000) were less than the level of significance (0.05). The study therefore accepts the alternate hypothesis and states as follows: direct compensation is significantly associated with employee performance in the Rivers State Board of Internal Revenue Service. This implies that employees are willing to put more effort in the organisation if the board pay their salary, base wage adjustment, house rent allowance, long-term incentive and short-term bonus.

HO2: Indirect compensation does not significantly associate with employee performance in the Rivers State Board of Internal Revenue Service.

The Effect of Compensation on Employee Performance in Nigeria Civil Service: A Study of River … 15

Table 4: Correlations

Indirect compen-

sation

Employee perfor- mance

Spearman’s rho

Indirect compen- sation

Correlation Coefficient

1.000 .715**

Sig. (2-tailed)

. .000

N 32 32 Employee perfor- mance

Correlation Coefficient

.715** 1.000

Sig. (2-tailed)

.000 .

N 32 32

** Correlation is significant at the 0.05 level (2-tailed)

Based on Mehran et al. (2014) benchmark for rejecting and accepting null hypotheses using the SPSS the null hypothesis is hereby rejected on the basis that p-values (0.000) were less than the level of significance (0.05). The study therefore accepts the alternate hypothesis and states as follows: indirect compensation is significantly associated with employee performance in the Rivers State Board of Internal Revenue Service. This means that the provision of safety allowance, health allowance, and work tools availability, end of year gift, breaking time allowance, vacation allowance and work- room availability will enhance employees’ performance in the board of internal revenue.

Discussion of Findings

Result of hypothesis 1 shows that direct compensation has a positive effect on employee performance. This corresponds with findings of Okwudili (2015b); Obasan (2012); and Osibanjo et al. (2014). Okwudili (2015b) concluded that “all round development of the food service industry for higher productivity and efficiency is possible with the effective exploitation of employees through monetary rewards”. Obasan’s (2012) findings show that compensation strategy has the potential beneficial effects of enhancing workers’ productivity and by extension improving the overall organisational performance. Osibanjo et al.’s (2014) results showed a strong relationship between compensation packages and employees’ performance and retention.

However, the result of hypothesis 2 shows that indirect compensation has a positive effecton employee performance. This is in line with findings of Okwudili (2015a), and Oburu and Atambo (2016). Okwudili’s (2015a) findings indicate that non-monetary rewards and productivity of employees have a positive relationship which is significant at 5% level of probability (2- tailed). He concluded that “higher productivity

and efficiency of employees in government parastatals is possible with the effective exploitation of human resources through non-monetary rewards and recommends amongst others that government should motivate their staff more by involving them in self developmental programmes with good remuneration payment, incentive packages etc. that will signify that the organisation needs their personal outputs”. Oburu and Atambo’s (2016) findings revealed that non- financial compensation measured in terms of participation and/recognition, better workplace environment, job design, career development and training drive up employee performance as well as retention of staff.

Conclusion

Based on the discussion of findings, the study concludes that compensation measured in terms of direct and indirect compensation, will enhance employee performance in the Rivers State Board of Internal Revenue.

Recommendations

Drawing from the conclusion, the following recommendations were made:

Civil service commission should employ qualified human resource personnel that will oversee the affairs of employee compensation as this will remove the bottleneck surrounding the non-implementation of employees’ compensation.

Allowances due to workers should be promptly paid to them to avoid ineffectiveness in the civil service.

Compensation fund should be set aside for compensating workers.

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