Impact of Employee Compensation on Firm's Performance

Abstract

Compensation is not just the price for the services rendered by the employees but it has a major role to play in retaining the employees in the present service. This paper attempts to determine the relation between employee compensation and firm's performance. Compensation is a motivating force to work harder, ensure loyalty to the present position thereby avoiding job hopping. This study reveals a positive relation between employee compensation of chemical industry and the performance of the firms. Thus employers must ensure that the compensation is commensurate with the firm's performance in order to retain the talent in the industry.