EFFECT OF FINANCIAL COMPENSATION ON EMPLOYEE PERFORMANCE THE CASE OF AHADU RADIO AND TELEVISION PLC

Abstract

This study seeks to assess the effect of financial compensation on organizational performance of Ahadu Radio and Television. This research studied financial compensation practices in the area of Basic pay, Allowances, Cash bonus and Salary increment. Both Explanatory and descriptive design was used while a questionnaire was used to gather primary data. The study sample in terms of the respondents covered randomly selected 156 employees of Ahadu Radio and Television at main office and branch offices in Addis Ababa. The data collected was analyzed with the aid of descriptive statistical techniques such as frequencies, percentages and mean score. More so, correlation and multiple linear regressions were used to examine the relationship between study variables using Statistical Package of Social Sciences Version 25. The findings of the study revealed that the combined effect of various financial compensation management practices influenced organizational performance positively. The result of regression also indicates that all predictor variables (Basic pay, Allowances, Cash bonus and Salary increment) have statistically significant contribution on organizational performance. The adjusted R² of 0.481 indicates 48.1% of the variance in organizational performance can be predicted by financial compensation management practiced by the company. Thus, it can be concluded that improved financial compensation management practices are significantly influencing organizational performance. Therefore, the management of Ahadu Radio and Television should improve its financial compensation management practices as a way of improving the company performance