Compensation as Predictor of Employee Performance and Intent to Stay: Input to Compensation Policy Improvement

The growing importance of human capital to the success of the selected Higher Education Institution has increased the efforts of the management and most especially the human resources department to learn what the institution can do to boost employee performance and motivate them to remain in the organization for a long period of time. This paper investigated the influence of compensation and benefits on employee performance and intention to remain in the organization. Various statistical treatments were conducted. Regression analysis was used to know how the components of compensation and benefits affect the levels of employee performance and intent to stay. The results indicated that merit and educational benefits were the best predictors of the quantity of work; educational benefits were the best predictor of quality of work; educational benefits and group life insurance were the best predictors of employee timeliness; year-end bonus and educational benefits were the best predictors of employee absenteeism; and educational benefits were the best predictors of employee tardiness. For the intent to stay, the results indicated that base pay, mid-year bonus, birthday cash gift, and merit are the most useful predictors. Pearson’s Correlation was used to know if there is a significant relationship between compensation and employee performance and employees’ intent to stay. The results indicated that compensation and benefits have a positive significant relationship with employee performance and intent to stay. ANOVA was used to know if there is a significant difference in the responses of the respondents on the compensation as a predictor of employee performance and intent to stay when grouped according to age, sex, and position classification. The results indicated that there is no significant difference in the responses of the respondents on the compensation as a predictor of employee performance and intent to stay when grouped according to profile.