Cogent Business & Management

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Assessing the effect of employee welfare and

compensation on organizational performance: a
case of Sahel Sahara Bank Ghana limited

Isaac Ampong

To cite this article: Isaac Ampong (2024) Assessing the effect of employee welfare and
compensation on organizational performance: a case of Sahel Sahara Bank Ghana limited,
Cogent Business & Management, 11:1, 2315690, DOI: 10.1080/23311975.2024.2315690

To link to this article: https://doi.org/10.1080/23311975.2024.2315690

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Cogent Business & Management
2024, VOL. 11, NO. 1, 2315690
https://doi.org/10.1080/23311975.2024.2315690

Management  | Review Article

Assessing the effect of employee welfare and compensation on
organizational performance: a case of Sahel Sahara Bank Ghana
limited
Isaac Ampong
Department of Management and General Studies, Christian Service University College, Kumasi, Ghana

ABSTRACT ARTICLE HISTORY

The employee rewards policy of any organization shapes behavior and work patterns, Received 9 May 2022
playing a significant role in organizational development. This is because such policies Revised 26 December 2023
dictate the level of motivation necessary to achieve both individual and corporate Accepted 2 February 2024
objectives. The primary asset of any organization is its human resources. In assessing KEYWORDS
an organization’s overall performance, placing emphasis on retaining a skilled and Compensation;
productive workforce is crucial. Highly motivated employees contribute value to the employees’ welfare;
organization by effectively accomplishing their goals and objectives. This article aims to organisation;
determine the presence of a relationship between these variables and assess the extent performance; bank
to which compensation and employee welfare influence the organization’s performance. REVIEW EDITOR
The research adopted a descriptive research approach, utilizing both qualitative and Huifen (Helen) Cai,
quantitative data to provide a comprehensive depiction of the specific details pertaining Middlesex University
to the selected organizations. For this research, the entire population of 30 respondents Business School, United
from the organization was sampled using a stratified random sampling technique to Kingdom
ensure that the desired conclusions could be drawn. This research employs a SUBJECTS
correlational design as its research design. Data collection involved gathering information Employment Relations
from both primary and secondary sources, with the administration of questionnaires for
the acquisition of primary data. The findings derived from the research indicated that
an effective compensation and employee welfare system is the backbone of all policies
concerning the acquisition and utilization of human resources which in the long run
influences the performance of the organisation. The study recommended the need for
management to employ positive techniques to encourage high performance from staff
and management to ensure equity in the distribution in employee welfare and
compensation packages.

1. Introduction
In the age of extensive globalization, fluctuating market economies, intense competition, and rapidly
evolving environments, the prosperity and expansion of an organization hinge significantly on the per-
formance and well-being of its employees. The fundamental vitality of any firmly established organiza-
tion lies in the competence of its human resources. (Punch & Sugden, 2013). Organizations are formed
with the goal of efficiently utilizing diverse human and non-human resources to attain specific objectives.
However, the inadequate focus on the proper welfare and compensation of employees by many orga-
nizations often results in adverse effects on organizational performance (Pamela et al., 2017). The absence
of motivation for employees to perform satisfactorily can hinder both the performance and the growth
trajectory of the organization over time. Any organization aspiring to achieve ongoing success and
growth must, therefore, prioritize ensuring that its human resources are well-motivated and satisfied to
operate at their optimum level (Fernet et al., 2012).

CONTACT Isaac Ampong [email protected] Department of Management and General Studies, Christian Service University
College, Kumasi, Ghana
© 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which
permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been
published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent.
2 I. AMPONG

In accordance with Human Resource philosophy, employees constitute vital business resources that
require careful management to optimize returns on investment and attain organizational objectives.
Prioritizing a healthy and safe working environment, addressing staff welfare, and addressing motivation
and productivity issues are crucial considerations for every organization (Montoya Agudelo & Boyero
Saavedra, 2016). To foster employee fulfillment in the workplace, organizations should offer the necessary
compensation and welfare benefits. This approach encourages employees to be more willing to dedicate
their time, energy, skills, and technical know-how to contribute to the optimal growth of the organiza-
tion (Osborne & Hammoud, 2017).
The idea of employee welfare originated from a humanitarian perspective, aiming to address the hard-
ships faced by the working class. Over time, it evolved into a utilitarian philosophy, serving as a moti-
vating force for both labor and those with an interest in it (Pirson & Dierksmeier, 2014). Welfare embodies
a corporate attitude or commitment demonstrated through explicit care for employees at all levels, influ-
encing both their work and the environment in which their work is carried out (Farooq et al., 2014). It
focuses on the overall well-being of employees, encompassing both their work and personal lives. It
involves the efforts made by employers to enhance the quality of life for workers. In contrast, compen-
sation pertains to the output and benefits employees receive, including pay, wages, and monetary
rewards aimed at incentivizing improved performance (Ek & Mukuru, 2013).
The success of many organizations is not solely attributed to competitive products or advanced tech-
nology. More importantly, it stems from effective management that creates an enabling environment and
provides incentives, motivating employees to enhance their performance (Hana, 2013). Prioritizing
employee welfare is imperative for any organization aiming for growth. By offering a conducive environ-
ment and improved compensation, employees are highly motivated, potentially positively impacting the
organization’s performance and productivity, all other factors being equal. Any employee that feels con-
tented at the workplace will automatically deliver their best, boosting the productivity and growth of the
organization (Morgan, 2017). To stay competitive in the contemporary marketplace, organizations must
focus on retaining their human resources to boost productivity. Retention involves providing competitive
compensation (both direct and indirect) and attending to their welfare, fostering a work environment
that encourages heightened effort and increased productivity. Recognizing an interdependent relation-
ship between organizational performance and employee performance, organizations are continually striv-
ing to enhance the overall effectiveness of their workforce (Akala, 2012).
Some argue that employees shouldn’t require coercion to give their best; when working in conducive
conditions and experiencing high job satisfaction, optimal performance should come naturally (Knecht,
2014; Muo, 2013; Ireri, 2015). Considering this context, the researcher aims to investigate how employee
welfare and compensation influence organizational growth. The intention is to bring attention to this
matter and propose suitable approaches for the management of numerous organizations and human
resource practitioners in addressing challenges related to the subject of study.
Individuals possess diverse needs that they anticipate fulfilling. According to Abraham Maslow’s the-
ory, people are driven to fulfill specific needs, and certain needs take precedence over others.
Consequently, employees seek to satisfy their needs within the work environment to experience motiva-
tion for optimal performance (Green et al., 2017).
Over the years, certain organizations have considered employee welfare and compensation as an
added expense or a form of liability to their operations. Consequently, they may not adequately com-
pensate their employees, and when they do, they may not offer suitable welfare packages related to
working conditions. Often, the efforts made to compensate and address an employee’s welfare do not
proportionally match the effort and skills contributed by the employee to the organization (Moore &
Viscusi, 2014). Koehler et al. (2016) emphasized that the presence of even one discontented employee
or an employee harboring grievances can potentially spread discontent throughout an entire organiza-
tion. This, in turn, leads to lower efficiency, diminished morale, and an overall reduction in production.
It can be asserted that numerous organizations prioritize resources like materials, machinery, and
profit over human resources. The research is inspired by the numerous complaints from employees at
Sahel Sahara Bank regarding unsatisfactory compensation packages and inadequate welfare. These
employees argue that the provided benefits do not align with the level of effort they contribute to the
production process, negatively impacting their morale and performance.
 Cogent Business & Management 3

2. Research objective
The research objectives of the study are:

a. Identify the Impact of Employee Welfare on Organizational Performance

b. Identify the Relationship Between Compensation and Organizational Performance

3. Significance of the study

The study on ‘Assessing the Effect of Employee Welfare and Compensation on Organizational Performance:
A Case of Sahel Sahara Bank Ghana Limited’ holds significant importance for various reasons:

a. Organisational Improvement: By demonstrating how employee welfare and compensation affect key
performance measures, the study offers insights that can help Sahel Sahara Bank’s organisational
performance.
b. Strategic Decision-Making: The study’s conclusions can help Sahel Sahara Bank make strategic deci-
sions by assisting in the creation and modification of employee welfare and pay policies that are in
line with company objectives.
c. Employee Satisfaction and Retention: Raising employee satisfaction may result in higher retention
rates. This can be achieved by educating yourself on the implications of welfare and remuneration.
Employees that are content and motivated are more likely to make valuable contributions to the
company.
d. Competitive Advantage: Sahel Sahara Bank can gain a competitive edge in the banking industry by
implementing effective employee welfare and compensation policies. This can help the bank become
more successful overall and improve its reputation in the market by attracting and keeping out-
standing individuals.
e. Employee Engagement: Enhanced employee engagement can result from an awareness of how
welfare and pay affect performance. Motivated, effective, and devoted to the company are traits of
engaged workers.

4. Literature review
In reviewing the relevant literature and documentation of employee welfare and compensation, the
researcher seeks to acknowledge the ideas of other authors and bring to light the set of components
and their variables that impact on organizational performance and the explanation of terminologies with
regards to the topic at hand.

4.1. Conceptual framework

Employee welfare refers to the systematic enhancement of workers’ health, safety, overall well-being, and
the cultivation of skills and efficiency beyond the established minimum standards (Choudhary, 2017).
Employee Welfare stands as a crucial aspect of organizational relations, providing an additional dimen-
sion of satisfaction to workers that goes beyond monetary compensation. As industrialization and mech-
anization continue to progress, the significance of employee welfare has gained additional prominence.
In the face of the accelerated pace of modern life, workers within an organization require more than just
basic sustenance amenities to thrive (Sukdeo et al., 2017). An additional incentive is essential to sustain
both the physical and mental well-being of the employee. Once the employee has been recruited and
trained, specific working conditions must be optimized to enhance motivation for better service to the
organization. Welfare facilities are crafted to ensure the well-being of the employee, typically without
directly translating into monetary benefits for the employees (McLellan, 2017).
The scope of employee welfare is extensive. According to the International Labour Organization, it
encompasses anything undertaken for the comfort, enhancement, intellectual development, or social
4 I. AMPONG

well-being of employees, exceeding the remuneration they receive (Min et al., 2019). Employee welfare
comprises diverse services, facilities, and amenities offered to enhance the well-being of employees
(Keitany, 2014). As per Okoye & Ezejiofor (2013), staff development and employee welfare stand as
invaluable assets within an organization, aligning with the organization’s overarching goals of productiv-
ity and profitability.
There are frequently insufficiently thorough studies in the literature that explicitly examine the com-
plex and subtle relationships between employee welfare policies and how those policies affect an orga-
nization’s performance. Although the possible impact of employee welfare on organisational outcomes is
acknowledged, more comprehensive research that goes beyond generalisations is required. Moreover,
there can be a lack of knowledge regarding the precise aspects of worker welfare that have the biggest
impact on the performance of the company. Another significant gap in the literature is the dearth of
studies that consider different industries, organisational environments, and cultural aspects (Ko & Hur,
2014; Goebel & Weißenberger, 2017; Kwenin et al., 2013).
Compensation, as per the definition provided by Harvey (2013) refers to ‘the amalgamation of all cash
incentives and fringe benefits received by an employee from a company, constituting the entirety of an
individual’s total compensation. El-Brolosy & Stainier (2017) defines Compensation as an extensive spec-
trum of both financial and non-financial rewards provided to employees in recognition of their services
to the organization. He elaborates that compensation includes remuneration through wages, salaries, and
additional employee benefits such as paid vacations, insurance, maternity leave, free travel, retirement
benefits, and more. The compensation package is typically categorized into Direct and Indirect
Compensation, encompassing both financial and non-financial rewards (Haque, 2017).
Compensation is a part of human resource management that deals with all forms of rewards that
people receive for carrying out organisational responsibilities. The goal is to have happy, motivated
employees who are drawn to their work and who will go above and beyond for their company. An
employee-employer double input-output exchange (Parashakti et al., 2017). Employee compensation is
the benefit they obtain in return for carrying out organisational duties. Pay consists of both direct and
indirect salaries. Payroll, bonuses, commissions, commissions based on performance, overtime, and holi-
day premiums are examples of direct compensation. Indirect compensation includes things like health
benefits, housing allowances, meal allowances, utility allowances, incentive bonuses, shift allowances,
hospitalisation costs, out-of-station allowances, vehicle loan benefits, yearly leave allowances, basic allow-
ances for cars, and so on (Mytty et al., 2016). The compensationt that employees receive for carrying out
organisational duties is known as compensation. Wages, both direct and indirect, constitute compensa-
tion. Indirect compensation is paid in the form of medical benefits, housing allowances, meal allowances,
utility allowances, incentive bonuses, shift allowances, hospitalisation expenses, out-of-station allowances,
vehicle loan benefits, annual leave allowances, car basic allowances, etc. Direct compensation includes
wages, salaries, bonuses, commissions based on performance, overtime work, and holiday premium
(Tingle, 2017). Compensation has a direct impact on employees’ job satisfaction and performance, mak-
ing it an important component of personnel management. Compensation affects all members of the
organisation to some degree and has the potential to be a very useful and effective tool, whether used
knowingly or unknowingly (Gomez-Mejia et al., 2014).
The idea that compensation affects behaviour is one of the fundamental tenets of compensation the-
ory. The fundamental idea came from the work of behaviour psychologists who supported operant con-
ditioning, such B.F. Skinner. Rewarding an organism for a certain behaviour increases the probability that
the organism will repeat that behaviour. When individuals in an organisation receive recognition for
exhibiting acts that result in favourable consequences, they are more likely to carry out similar actions
again. It is noteworthy to acknowledge that a minor portion of the population does not subscribe to
these beliefs. Some claim that reward systems cannot effectively regulate or modify human behaviour
because it is far too complex. Their reasoning highlights how important it is to comprehend compensa-
tion’s function as a tool for fostering employee retention and happiness. Knowing how its compensation
system affects the organisation is vitally important. Pay has a significant impact on achieving employee
career goals and advancing the profitability of a company. Emphasis has been placed on the need for
compensation to be carefully designed. If this is not done, compensation systems may inadvertently fail
 Cogent Business & Management 5

to encourage the desired behaviour (such as an inefficient compensation plan) or worse, may encourage
the undesirable behaviour (such as individualistic behaviour in a team setting) (Skinner, 2014).
The idea that compensation affects behaviour is one of the fundamental tenets of compensation the-
ory. The fundamental idea came from the work of behaviour psychologists who supported operant con-
ditioning, such B.F. Skinner.
There is a dearth of targeted research in the literature on the dynamics of employee welfare and
compensation practices at Ghana’s Sahel Sahara Bank. Few research papers thoroughly examine the ways
in which Sahel Sahara Bank’s distinct organisational and cultural characteristics impact the relationship
between employee well-being, compensation, and overall organisational performance. Furthermore, there
is a dearth of study on the long-term impacts of these practices on sustained performance, and a more
sophisticated comprehension of the ways in which employee happiness and perceptions influence organ-
isational outcomes is required in Ghana’s banking industry.This paper strives to examine the impact of
employee welfare and compensation on organizational performance. Drawing upon the literature
reviewed by the researcher, It is inferred that the performance and productivity of the organization are
contingent on the independent variables, constituting a blend of compensation and employee welfare.

4.2. Empirical framework

Recent research has examined employee welfare and recommended that lack or inadequate welfare
package to the employees limits the social and organizational conditions of workers and impact on their
productivity (Elson & Pearson, 1981). It could impact also on the team spirit which according to Vallas
(2003) limits ‘the firm’s ability to provide an overarching normative or moral framework within which
workplace change might unfold, leaving team systems vulnerable to anomic tendencies, to status dis-
tinctions among employees and to other sources of instability’. The study of Chirdan et al. (2009) showed
that workers will be more motivated to do their work if salaries are competitive and market related, if
the management supports staff welfare and encourage ‘managerial support for staff career development,
availability of tools and consumables in the workplace, progress towards personal professional goals
appear to play a role in worker motivation.’ Regarding the issue of realization of the incentives and wel-
fare suggested by Chirdan et al. (2009), there needs to be administrative will on the part of the employ-
ers to implement and political will on the part of the regulator to compel and enforce compliance and
performance.
Omotayo (2014) analyzed the impact of compensation system on the job performance of employees
and this study was conducted on preferred private institutes in Ogun State, South- West Nigeria by using
questionnaire. From his findings, he concluded that institutions which had more appropriate compensa-
tion packages demonstrated an affirmative effect on employee’s performance. This also brought about
satisfaction and causing employees to become sincere with their job and stay in organization. Muhammad
(2014) studied on the impact of compensation on employee performance and organizational commit-
ment by using SPSS as a statically tool, he concluded that Compensation in the form of incentives, sal-
aries will perform an important part to enhance motivation of employees in Local Revenue Management.
Rafique et al. (2011) studied the extent to which compensation management can be used as a tool
for improving organizational performance in a typical public-sector organization in the Anambra State of
Nigeria by using questionnaires and concluded that the outcome of the hypothesis reveals that the
reform programs of the Anambra State Government have not had a significant effect on financial com-
pensation policies and practices in the civil service. Nazir et al. (2013), checked that what is the degree
of organizational dedication and job satisfaction presently in the United kingdom’s higher education
sector and universities by using correlation technique and concluded that United Kingdom Higher
Education sector propose both cash and non-cash basis rewards to members of organization and makes
them capable as it counts that the member of organization are social agents. Employees want to be
convinced that their employers are interested and committed to their welfare before they can bring out
their all in the service of the employers and ensure the organization’s success. Every employee wants a
caring organization. Amah (2010) believes that loyalty of the employees can be sustained when they get
more than just a salary.
6 I. AMPONG

From the literature review, the variables that were established for the study are Independent Variables
and these comprises of

• Direct Compensation; Salary, Wages

• Indirect Compensation; Fringe benefits
• Statutory Welfare: Basic amenities backed by law; Social security, occupational health, safety, and
environment.
• Voluntary/Non-statutory; Personal Health Care, Employee Assistance Programs

4.3. Dependent variable

Organizational performance
The independent variables form the core drivers of the dependent variables, and the proper manage-
ment of the independent variables will in the long run have a net effect on the dependent variable.

5. Methodology adopted for the study

This study is descriptive research employing both qualitative and quantitative data. To enable the
researcher to address the objective of the study, descriptive research was the preferred choice since it is
meant to describe or give a full picture of the specific details of the selected organizations.

5.1. The study population

The research targeted the staff of Sahel Sahara Bank, comprising individuals from different departments.
These departments included the Operations department (7 staff members), Business Promotion depart-
ment (6 staff members), Credit and Debt Recovery department (2 staff members), Treasury department
(2 staff members), Risk department (2 staff members), Human Resource department (3 staff members),
Accounts department (2 staff members), Foreign Transaction department (2 staff members), Audit depart-
ment, and IT department (2 staff members each). The study units consisted of the staff selected from
these diverse departments for the research’s purpose.

5.2. Sample size and sampling technique

In crafting the research study, the researcher considered the necessity of drawing inferences from a
sample of the population to address the research questions and fulfill the research objectives. The sam-
ple size comprised 30 respondents selected from the organization, encompassing various departments.
The distribution of respondents across departments was as follows: Operations department (7 staff mem-
bers), Business Promotion department (6 staff members), Credit and Debt Recovery department (2 staff
members), Treasury department (2 staff members), Risk department (2 staff members), Human Resource
department (3 staff members), Accounts department (2 staff members), Foreign Transaction department
(2 staff members), and Audit and IT departments (2 staff members each).
The collection of data for this research employed stratified random sampling, ensuring the selection
of respondents from each unit or stratum.

5.3. Source of data collection

The sources of data for this research were primary and secondary data collection. Primary data is known
as the data collected for the first time through field survey (Sutton & Austin, 2015).). Data is gathered
with predefined objectives to evaluate the status of the variables under study. The primary data collec-
tion predominantly employed a questionnaire as the main tool, consisting of both open-ended and
close-ended questions (Linaker et al., 2015). The questionnaire served to gather information regarding
 Cogent Business & Management 7

the influence of compensation and employee welfare on organizational growth. Additionally, the
researcher incorporated secondary data into the study. Secondary data encompasses information that
has already been collected and is readily available from various sources, whether published or unpub-
lished. Essentially, secondary data enhances the researcher’s comprehension of the topic, providing a
clearer perspective and incorporating other viewpoints on the study.

5.4. Instruments for data collection

To conduct this research, data were gathered through a survey questionnaire. The questionnaire was
crafted with appropriate inquiries, incorporating modifications from related research and questions devel-
oped by the researcher. Comprising 36 questions, the survey delved into participants’ perceptions regard-
ing the impact of compensation and employee welfare on organizational performance. The questionnaire
was chosen due to the dual nature of the study, encompassing both quantitative and qualitative aspects.
It included a mix of open-ended and close-ended questions, incorporating various types such as
open-ended and close-ended questions.

a. Open ended questionnaire: An open-ended question gives the respondents complete freedom to
decide the form length and detail of the form.
b. Close ended questionnaire: The close-ended question is of two types they are as follows:
i. Dichotomous question: This type has only two answers in the form of ‘YES’ or ‘NO’
ii. Multiple – choice question: In this case, the respondents are offered two or more choices, and the
respondent must indicate which is applicable in the following cases.
iii. Likert Scale
It is the most widely used approach to scaling responses in survey research, such that the term (or more
accurately the Likert-type scale) is often used interchangeably with rating scale.

5.5 Method of data presentation and analysis

The data presented was analyzed using percentages. The data collected from respondents were carefully
checked and edited. Individual items on the questionnaire were edited with regards to the responses
given; the study was aided using the data analysis program known as Statistical Package for the Social
Sciences (SPSS) Version 23.

6. Data presentation and analysis

In determining the relationship between compensation, employee welfare and organizational perfor-
mance, the researcher enquired from the respondents whether there is any relationship between these
variables. The responses obtained from these sampled employees on the above subject matter can be
seen in Table 1.
Respondents were asked whether they perceived any relationship between compensation and employee
welfare vis-à-vis the overall performance of the organization and majority representing (80.0%) of the
respondents were of the view there exist a relationship, (10.0%) each of the remaining respondents
responded ‘no’ and ‘somehow’ on the existence of a relationship.
Inferring from the responses provided in Table 1, majority of the respondents which represented
(80%) of the respondents held a strong view of an existence of relationship between the variable. It was
determined from the survey that the performance of the organization has a bearing on the effort put
into the organization by the employees; therefore, as employees are adequately provided for by man-
agement, there is the possibility of employee satisfaction at the workplace. Positive compensation influ-
ences employees to give out their best especially if they have the notion that the more, they work, the
higher they receive compensation. When the environment is conducive enough, the employee enjoys
peace of mind and focuses on meeting targets as expected. The compensation and welfare packages
being enjoyed in Sahel Sahara Bank can also be said to exhibit similar relationships with the
8 I. AMPONG

Table 1. Relationship between compensation overall performance of organization.

Responses Frequency Percent Valid Percent
Yes 24 80.0 80.0
No 3 10.0 10.0
Somehow 3 10.0 10.0
Total 29 100.0 100.0
Source: Field data, 2017.

Table 2. Roles of compensation in meeting business objectives.

Responses Frequency Percent Valid Percent
To meet the employer’s legal Obligation 5 16.6 16.6
To encourage employees to work hard 6 20.0 20.0
To help employees meet basic needs 6 20.0 20.0
To enhance the organization’s image 6 20.0 20.0
All the above 7 23.3 23.3
Total 30 100.0 100.0
Source: Field data, 2017.

performance of the bank since the two factors (compensation and employee welfare) act as a motiva-
tional tool or catalyst for the employees to give off their best in performance.
The finding corroborates with Lai et al. (2011) that an efficient compensation system results in orga-
nizational growth, expansion and exhibit a positive relationship between employee satisfaction and
performance.
Many human resource commentators have argued about the role compensation plays in aligning
employee behaviour with business objectives. To them this can be attributed to pay, rewards and other
incentives received by employees for their performance. In authenticating the views of these human
resource practitioners, questionnaires were sent to the sample employees of the bank to solicit their
views and their responses can be seen in Table 2 below:
From the table, (23.3%) of the respondents believed that all the options provided by the researcher
were some of the reasons why there was a need for compensations. (20.0%) each believed compensating
employees turned to encourage employees to work hard, help employees meet basic needs and to
enhance the organization’s image overall. The rest representing (16.6%) of the respondents believed it
was out of legal obligations on the company’s part that was why they were being compensated by their
employer.
As far as assessing the current compensation packages available in Sahel Sahara Bank were concerned,
the researcher consulted the Collective Bargaining Agreement of the institution which was provided by the
Human Resource Department and had brief interviews with some members of the management, namely the
head of operations, human resource, and finance. The researcher also consulted the administrative policy
manual and code of ethics of Sahel Sahara Bank for the information required. The consultation revealed that
fuel allowance was only available to both senior and junior staff of the bank who owned vehicles. This is a
small allowance added to the salary of those individuals. This is also a policy that is instituted by the bank
as an incentive to those individuals who own cars. It is stated clearly that it also depends on the institution’s
ability to pay such packages. Regarding vacation or annual leave, every employee is entitled to a minimum
of fifteen (21) working days per calendar year as annual leave as per the labour laws but specifically as
relates to the practice in Sahel Sahara Bank, depending on your grade and qualification you are entitled to
between 25 to 40 working days per year as mandatory annual leave. Employees with the qualification of
Higher National Diploma (HND) and above are entitled to 36 working days while those with qualifications
below the HND get 28 and 21 working days annual leave per calendar year.
There is also provision for casual leave for staff that requires short periods for personal business and
would not want to take the full annual leave, but this is however deducted from their entitlements on
annual leave. The policy also make provision for staff who might not have work for the mandatory one
calendar year to qualify for annual leave by providing compassionate leave, the amount which is left
at the discretion of the human resource managers. Talking about the free medical insurance, employ-
ees of the bank get reimbursed for any medical bills they incur during the time they remain
 Cogent Business & Management 9

employees of the bank. The bank employees are covered by a certified private health insurer and
services that are obtained outside this private health insurance are reimbursed to the employee upon
presentation of the receipts which must be from certified health providers. Last regarding regularity
of promotion, there exists a promotion guideline which spells out the period of service until one
qualifies for promotion to the next level. This guideline was developed by the human resource depart-
ment of the bank as a guide for promotions at the bank. Employees depending on their grade and
specialty will serve between 3- 5 years to qualify for their first promotion and for a period of between
5-13 years for subsequent promotions.
With the above in view, respondents were to indicate which of the compensation packages they were
aware of. It was observed that the that 2 out of 5 management respondents (40%) were aware of almost
all the compensation packages that were available in the institution and 3 out of 5 (60%) were not
aware of some of the packages. This in the researcher’s opinion is a flaw in the system since manage-
ment members are the policy makers and sometimes implementers. It therefore beholds on every man-
agement member to be abreast with all policies concerning the institution hence knowledge of the
compensation packages available.
From the interview with the management team, it showed that the unawareness level of both the
senior management and middle level management staff was higher than their awareness level. This
implies that the employees were not very abreast with the compensation packages available in the
organization. According to the organizational structure of the bank which the researcher had assessed
during data collection, this category of staff formed the direct policy implementers at the middle level,
thus representing management at the various departments. Their role therefore required that they know
and understand the policies to interpret to their subordinates.
The awareness levels of junior staff were not any different from the senior management, middle and
senior non-management staff. This is a normal trend as stated by Aswathappa (2007) in literature to the
tune that they are usually unaware since they are not involved in the policy formulation and therefore
make demands to meet their needs. This as mentioned earlier could be an indication that the policy
documents that contained these compensation packages may not be available to all employees as
should be the case. The focused groups and grapevine then become their source of information con-
cerning these packages. This aligns with the findings of Stringer et al. (2011), suggesting that the typ-
ical employee frequently lacks comprehensive insight into their entitled total compensation. This
phenomenon is attributed to the management’s limited effort to readily provide such information to
employees.
With regard whether compensation motivates employees to perform better at the workplace using
the study area, the response obtained from the respondents whom questionnaires were distributed can
be seen in Table 3 below:
Table 3 sought to find out whether compensation motivates employees to perform better at the
workplace and (63.2%) of the respondents agreed that compensation motivates their work inputs.
This implied that when the employee is well compensated, it turns to act as a catalyst (motivation)
to boost the performance of the employee. (30%) of the respondents were neutral to the question
posed and the final (6.0%) represented the respondents who disagreed with the question posed.
Inferring from the table above, it was clear that compensation issues play a pivot role for employees
to put up their best and as such should not be ignored by organizations that had set targets for their
employees.

Table 3. Compensation motivates employees to perform better.

Responses Frequency Percent Valid Percent
Disagree 2 6.0 6.0
Neutral 9 30.0 30.0
Agree 11 36.6 36.6
Strongly Agree 8 26.6 26.6
Total 30 100.0 100.0
Source: Field data, 2017.
10 I. AMPONG

7. Conclusion
This research provided an overview and discussion of the effects of employee welfare and compensation
on organizational performance. It essentially focused on the perception of employees on the current
compensation and employee welfare available in the bank influence these variables on the performance
of the employees which is then translated to the performance of the organization overall. The growth
and performance of any organizational is linked to the strength and make-up of its human resource and
same has been identified in Sahel Sahara Bank. Proper management of employee related issues such as
compensation and welfare lead to satisfaction of the employee on the job as well. It has been deter-
mined that proper employee welfare packages together with the right compensation package will pro-
duce a well-motivated staff that is ready to deliver to optimum. Findings further confirm that an effective
compensation and employee welfare system is the backbone of all policies concerning the acquisition
and utilization of human resources which in the long run influences the performance of the organization.
With regards to the employees being able to assess the compensation and welfare packages in the bank,
Management must ensure that employees are trained to be conversant with the policy guidelines on
compensation and employee welfare and apply them accordingly.
There is a direct relationship between compensation, employee welfare and organizational perfor-
mance and management must ensure that they manage these variables (compensation and employee
welfare) effectively in such a way that it reflects in a positive outlook on the performance of the bank.
Employees perceive compensation and welfare as a motivator to enhance their performance therefore
management must show keen interest in those areas of human resource and boost the current level of
both compensation and employee welfare in the bank if they want to experience high worker-output
that will reflect in a positive outlook in terms of performance for the bank in the long run.

8. Recommendation for the study

It was found out from the study that though there were many compensation and welfare packages
available, the employees were not aware of these packages because no avenues were provided to
educate them on such packages. It is therefore recommended that the management of the institution
should provide for every new employee a copy of the administrative policy manual and code of eth-
ics and discuss the items therein during orientation. For existing employees, periodic workshops and
training should be organized to get them educated on the compensation and welfare policies and
packages. Despite the willingness of staff to work hard because of the passion they have for their
respective professions, the kind of exposure it gives them and the advancement it brings profession-
ally, there should be a well enticing reward system to propel them to go the extra mile in the deliv-
ery of their duties. For the marginal number of staff who feels coerced and suffocated on the job
schedule and many at times pressurized into a situation they do not fit in, the bank authorities
needed to adopt stress management and counseling session for such staff to ascertain the exact
problem.

9. Suggestions for future research

Due to the scope and limitations of the study, the researcher recommends that further research should
be undertaken encompassing more organizations and more indicators that will help unearth the effect
of employee compensation on organizational performance at Sahel Sahara Bank, Head office branch is
welcomed. This will help management in the bank to align their strategies for better performance of
staff. This will ultimately improve the optimum performance of the bank as the performance of the
organization hinges on the performance of the employees all things being equal.

Disclosure statement
No potential conflict of interest was reported by the author(s).
 Cogent Business & Management 11

About the author

Isaac Ampong, a lecturer at Christian Service University College, Kumasi-Ghana, specialises in human resource manage-
ment. A current PhD candidate at the Central University of Technology of South Africa, his research focuse on employee
welfare and compensation. Ampong’s publications underscore his dedication to advancing knowledge in his field.

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