Compensation, Employee and Organisational performance in Guarantee Trust Bank Plc: A Secondary Data Analysis

Abstract

In this paper, we moved away from the questionnaire and interview data gathering approach to test the fundamental assumption of  human resource management (HRM) practices as they impact both employee and organisational performance using financial data. We  argued that performance is better appraised “a posteriori”. Thus, we extracted financial data from the annual financial reports from the  year 2002 to 2017 and the Pearson Correlation method was used for analysis. The analysis reveals that there is a strong positive and  statistically significant relationship between, (i) compensation and employee performance (0.815); (ii) compensation and organisational  performance (0.666); and (iii) between employee performance and organisational performance (0.903). However, the findings should be  treated with caution as these relationships do not imply a causal one. Importantly, the results strengthen the fundamental role of HRM  practice of compensation as one of the important drivers of employee performance that culminates into the overall improved  organisational performance.