Effect of Non-Financial Compensation on Performance of Employees of Shaba Water Company in Borama District, Somaliland

Abstract

The study investigated the effect of non-financial compensation on the performance of employees of Shaba Water Company in Borama district. Non-financial compensation is non-monetary or non-cash rewards given to employees for services rendered to an organization. Performance is the completion of actions with the skills and the outcome contributing to the achievement of organizational goals. The problem of the study was the low performance of employees of Shaba Water Company. Productivity declined by 0.4% in the 2015-2017 period. The study specifically determined the level of non-financial compensation, the average performance of employees and the effect of non-financial compensation on the performance of employees. The study was a cross-sectional survey of a random sample of 63 employees of Shaba Water Company. The study found that employees generally received high non-financial compensation, with an average performance of 55.83%, S = 16.65. The study found a significant difference in the performance of employees who receive high and those who receive low non-financial compensation, t (58) = 2.74, p = .008, ω² = .097. Non-financial compensation has a significant effect on the performance of employees and contributes 9.7% of the employee performance. Shaba Water Company should develop and maintain a regular system and methods of training employees, regulation of employee’s efforts and a means of promotion of employees once specific standards are met.