Effect of Compensation Systems on Employees’ Productivity in Nestlé Plc, Ogun State, Nigeria: The Moderating Role of Perceived Fairness

This study examined the effect of compensation systems on employee productivity in a Nigerian manufacturingorganisation, focusing on financial compensation, non-financial compensation, incentive-based compensation, and perceived fairness. A quantitative cross-sectional survey design was adopted, and data were collected from 300 employees using structured questionnaires. Multiple regression and moderation analyses were conducted using SPSS version 27. The regression model was statistically significant (F = 182.448, p < .001) with R² = 0.814, indicating that the predictors explain 81.4% of the variance in employee productivity. Financial compensation, non-financial compensation, incentive-based compensation, and perceived fairness all exert significant positive effects on productivity. However, the interaction effects between perceived fairness and the compensation variables were insignificant, suggesting that fairness does not moderate the compensation–productivity relationship. The findings indicate that compensation components and fairness independently enhance productivity.The study concludes that compensation systems play a crucial role in enhancing employee productivity. The study recommends that organisations should implement competitive financial rewards, structured incentives, robust non-financial benefits, and transparent compensation policies to sustain productivity.