Research Purpose: In the competitive landscape of Nigeria's pharmaceutical industry, understanding the relationship between compensation and employee performance is essential for sustaining profitability and growth. This study investigates the effects of salaries and wages, director’s remuneration, and staff training costs on the profit for the year of pharmaceutical firms in Nigeria.
Methodology: The study adopted an ex-post facto design, utilising Ordinary Least Square regression to analyse data obtained from annual reports of pharmaceutical firms from 2013 to 2022. Three research questions were raised, and corresponding hypotheses were formulated to guide the analysis.
Findings: The analysis revealed that salaries and wages significantly affect profit (t-value = 5.335750, p-value = 0.00001). Director’s remuneration showed no significant effect on profit (t-value = -0.630389, p-value = 0.5329). Staff training costs significantly impacted profit (t-value = 4.452571, p-value = 0.0001).
Conclusion: Employee compensation, particularly salaries and wages, significantly contributes to the financial performance of pharmaceutical firms in Nigeria. Attractive compensation packages are crucial for motivating employees and driving productivity, thereby ensuring steady and consistent growth.
Recommendations: Pharmaceutical firms should develop and implement effective compensation policies to retain talented employees, positively impacting profitability and share price value.
You may also start an advanced similarity search for this article.