Negative Compensation Shocks and Organizational Performance: Evidence from The Nigerian Banking Subsector

Abstract

This paper investigated the nexus between negative compensation shocks and organizational performance in the Nigerian banking subsector. The survey research method was adopted with questionnaire administered on branch service managers, head teller and fund transfer officers of five (5) selected banks in Delta State of Nigeria, resulting in a sample size of hundred (100)
respondents. Negative compensation shock metrics used are employee stagnation, salary reduction and demotion. Data collected from the field survey were analyzed using both descriptive (mean, standard deviation and correlation) and inferential (multivariate) statistical techniques. Based on the analysis of data, it was found that there is a significant nexus between the dimensions of
negative compensation shocks and organizational performance. Besides, negative compensation shocks negatively affect organizational performance. In view of this, it was recommended among others that bank managements should reduce the level of negative compensation. Bank management can revise and constantly appraising their compensation policies and practices.