PERFORMANCE-BASED COMPENSATION AND EMPLOYEE OUTPUT OF MICROFINANCE BANKS IN ENUGU STATE, NIGERIA

Abstract

The Study focused on performance-based compensation on employee output of microfinance banks in
Enugu State Nigeria. Specifically, the study aimed to pursue the following objectives: determine the effect of
individual performance-based bonus on employee commitment, ascertain the relationship between merit
increase and job satisfaction, determine the effect of piece-rate-scheme and organizational productivity and
ascertain the relationship between promotion-based incentive and job output. Survey research design was
adopted for the study. Hypotheses one and three were tested using simple linear regression tool while two and
four were tested using Pearson product moment correlation coefficient. The study had a population (352)
employees of the selected micro finance banks a sample of 222 was derived using Cochran (1963) sample size
determination formula. The total number of 222 copies of the questionnaire were distributed while 202 copies
were properly filled/returned and used while 20 copies were not properly filled. The findings indicated that
Individual performance-based bonus had significant positive effect on employee commitment of microfinance
banks in Enugu State Nigeria( r = 0.856; F= 99.104; t = 31.072; p< 0.05).There was a positive relationship
between merit increase and job satisfaction of microfinance banks in Enugu State Nigeria (r = 0.741; p<
0.05).Piece-rate-scheme had significant positive effect on organizational productivity of microfinance banks in
Enugu State Nigeria (r = 0.727; ; F= 394.055; t = 19.851; p< 0.05).There is a positive relationship between
promotion-based incentive and job output of microfinance banks in Enugu State Nigeria (r = 0.896; p< 0.05).
The study recommends that performance-based compensation had significant effect on employee output of
microfinance banks in Enugu State Nigeria.