EFFECTS OF COMPENSATION ON EMPLOYEE JOB PERFORMANCE:THE CASE OF OROMIA AGRICULTURAL RESEARCH INSTITUTE

Abstract

Human Resource Development is concerned with the provision of learning, development and training opportunities in order to improve individual, team and organizational performance. Compensation is one of the most important elements which motivate employees to contribute their best effort to generate innovative ideas that lead to better business functionality and further improve organizational performance both financially and non-financially. The purpose of this study is to assess the compensation management strategy and its relationship to employee performances in Oromia Agricultural Research Institute within the headquarter located at Gotera, Nifas Silk Lafto Sub-city, near Special Zone of Oromia and in its centers found at 17 different places in Oromia Regional State. A total of 286 sample respondents were selected using sample technique; of which 29 and 257 are from head office and centers, respectively. A semi-structured questionnaire was used to collect primary data. Additionally, secondary data were also gathered from previous research works in the sector and different published and unpublished manuscripts. The data were analyzed using SPSS statistical software version 20. Ordinal logistic regression was employed to analyze the relationship between compensation management and employee’s job performance. The analysis of this paper focused on the three compensation employee direct compensation, indirect compensation and employee job performance. Policy implication drawn from this study revealed that responsible governmental organization should adjustment the compensation management strategy and Special attention must also be given to all employees. In addition, the organization has to create opportunities that allow its employees to take a different advanced position as to utilize their maximum performances.