How does directors’ remuneration affect SMEs’ performance?

Afrifa, Godfred Adjapong; Adesina, Oluseyi Oluseun

doi:10.1108/raf-12-2016-0199

Cited by 11 publications

(25 citation statements)

References 107 publications

(129 reference statements)

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“…According to the findings of a study conducted by Mahmud et al (2018), remuneration has no significant effect on employee performance at Semarang State University. In contrast to the findings of (Agustiningsih et al, 2017;Calvin, 2017;Afrifa & Adesina, 2018;Nasution, 2019), which state that remuneration has a significant effect on employee performance as evidenced by a P-value greater than 0.05, this is what distinguishes the results of research by researchers.…”

Section: Discussioncontrasting

confidence: 59%

Effect of remuneration and job rotation on employee performance with job satisfaction as a mediation variable

Widiastutik

Rahayu²,

Juwita³

2022

IJRBS

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This study aims to analyze the effect of remuneration and job rotation on employee performance by mediating job satisfaction at the Faculty of Agriculture Brawijaya University. This research is quantitative with the method of collecting data using a questionnaire. The population in this study amounted to 95 employees from the Faculty of Agriculture Brawijaya University. This study used a saturated sample, from 95 questionnaires collected, the data obtained were then analyzed using SEM (Structural Equation Modeling) PLS. The results showed that the remuneration variable had no effect on employee performance, while job rotation positively and significantly affected employee performance. In addition, the results of this study also show that the variable job satisfaction as a mediating variable is able to have an influence on the job rotation variable so that it has a positive and significant effect on employee performance. The implications of the research results are expected to be input for the Faculty of Agriculture Brawijaya University to optimize potential.

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Section: Discussioncontrasting

confidence: 59%

Effect of remuneration and job rotation on employee performance with job satisfaction as a mediation variable

Widiastutik

Rahayu²,

Juwita³

2022

IJRBS

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“…Way ( 2002) made another research in the USA on SMEs, and surveyed compensation divided into two parts: he found that group performance-based compensation was a key area of employee objectives, by which the attraction, motivation and retention of colleagues is more effective; also, the level of the basic salaryin comparison with the competitorshad an impact on the performance of organisations. Afrifa and Adesina (2018) said, concerning the SMEs operating in the United Kingdom, that the optimum level of the remuneration of managers should be supported and determined by HR systems, as they had clear impacts on their performance. Although company performance is influenced by several factors (structure, strategy), it can be demonstrated at Canadian SMEs that the application of the principle of "pay-for-performance" made a contribution to the enhancement of organisational performance (Wang et al, 2018).…”

Section: Compensation At Small and Medium-sized Enterprisesmentioning

confidence: 99%

An empirical study of the internal factors influencing the application of compensation incentives in SMEs

Balogh

Sipos

Rideg

2020

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Purpose Competitiveness is a multidimensional construct, related to a number of external and internal company factors. This paper aims to provide empirical evidence on the relationship between the application of small- and medium-sized enterprises’ (SMEs) compensation incentives as an index/element of human system development and competitiveness. Design/methodology/approach A unique primary data set drawn from the Global Competitiveness Project on SMEs’ competitiveness was analysed, using cross-sectional data of 784 firms. First, descriptive statistics were used to show the data set peculiarities. Second, a forward logistic regression was applied to show the effects on the application of compensation incentives. A 25.1% of explanatory power was found by targeting the application of compensation systems by 7 firm-level principal factors and 30 control variables. Findings The findings suggest that there is a higher chance of the application of compensation incentives in cases when the employees possess a more substantial tacit knowledge and formal and informal relationship networks. It is also positively impacted by the higher level of intra-company manifestation of knowledge. Research limitations/implications The research was conducted among SMEs from eight countries, based on a unique questionnaire designed for small enterprises. The respective countries are from Europe and Latin America, which serve as a reference category for Hungary. Also, there is a high level of 0 answers for the involved variables. The binary logistic regression methodology is suitable for filtering out some of these; nevertheless, the proportion of uncertain factors remains high as it is indicated by the explanatory power. Originality/value The majority of the literature is dealing with large companies in the topic of competitiveness, whereas in this data set, a deeper analysis was carried out among SMEs from eight countries, comparing their results to the Hungarian ones. The findings can be used as reference points for future studies, and the understanding of the HR cycle within SMEs.

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“…However, according to agency theory, remuneration can limit agency problems and bridge the gap in interests between directors and shareholders. The assumption of agency theory is that companies design contracts for directors and managers with optimal incentives as their motivation to improve performance (Afrifa and Adesina, 2018).…”

Section: Directors' Remuneration On Roa and Pbvmentioning

confidence: 99%

The Influence of Corporate Governance Internal Mechanisms and Directors' Remuneration on Performance of the Company (The Case of Banking Industries in Indonesia)

Pravitasari,

Setiany

2022

J. Keuang. dan Perbank.

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This research was conducted with the point of knowing the impact of the corporate governance internal mechanism and the remuneration of directors on performance of the company. This research focuses on the internal mechanism consisting of the board of directors’ size, internal directors, external directors, Audit Committee, Nomination and Remuneration Committee, board meeting frequency, and ownership structure. Corporate performance consists of Return on Assets (ROA) utilized to measure financial performance while Price to Book Value (PBV) is utilized to measure market performance. This research data is derived from secondary data and is sourced from the official annual report of the company. The population used in this survey was from a banking company listed on the Indonesia Stock Exchange (IDX) between 2016 and 2020. This research used purposive sampling technique and obtained a sample of 38 companies. The analysis in this study uses a panel data regression model with the help of the EViews program. The results showed that the Audit Committee had a positive and significant influence on ROA but had no influence on PBV. The board meeting frequency has no influence on ROA, but this variable has a negative and significant influence on PBV. Meanwhile, the size of the board of directors, internal directors, external directors, Nomination and Remuneration Committee, ownership structure, and remuneration of directors have no influence on ROA and PBV.

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How does directors’ remuneration affect SMEs’ performance?

Cited by 11 publications

References 107 publications

Effect of remuneration and job rotation on employee performance with job satisfaction as a mediation variable

Effect of remuneration and job rotation on employee performance with job satisfaction as a mediation variable

An empirical study of the internal factors influencing the application of compensation incentives in SMEs

The Influence of Corporate Governance Internal Mechanisms and Directors' Remuneration on Performance of the Company (The Case of Banking Industries in Indonesia)

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