THE INFLUENCE OF COMPENSATION ON EMPLOYEE LOYALTY: A STUDY OF FIRST BANK PLC, LOKOJA, KOGI STATE
Abstract
This study examined how compensation influences employee loyalty at First Bank Plc, Lokoja Branch. A census survey method was employed, with 35 questionnaires distributed to permanent staff and 33 valid responses received, yielding a 94.29% response rate. Data were analyzed using descriptive statistics, Pearson correlation, multiple regression, and ANOVA. The results indicated a strong positive correlation between financial compensation and employee loyalty (r = 0.741, p < 0.01). Non-financial compensation, such as recognition and career development, also significantly influenced loyalty (β = 0.360, p < 0.01), with both combined accounting for 66% of the variation in loyalty (R² = 0.660). ANOVA revealed significant differences in perceptions of compensation challenges across job designation levels (f (2, 30) = 4.122, p = 0.025). These findings suggest that employee loyalty is maximized when both monetary and non-monetary rewards are balanced and fairly administered. It is recommended that management periodically review compensation systems to ensure equity, fairness, and opportunities for professional development.
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