Employee compensation, human resource policies, and organizational performance in Ankole Coffee Producers’ Cooperative Union, Kabwohe Municipality, Uganda

Steve James Andonzire; Alice Ngele Mwazuna; Kaaya Siraje; Alex Kanyesiime

doi:10.51867/ajernet.7.4.39

Authors

Steve James Andonzire Kabale University, Uganda
Alice Ngele Mwazuna Kabale University, Uganda https://orcid.org/0000-0001-7537-9391
Kaaya Siraje Kabale University, Uganda
Alex Kanyesiime Kabale University, Uganda

DOI:

https://doi.org/10.51867/ajernet.7.4.39

Keywords:

Coffee Producers, Cooperative Union, Employee Compensation, Human Resource Policies, Organisational Performance

Abstract

This study examined the effect of employee compensation on organizational performance and the moderating role of human resource (HR) policies in Ankole Coffee Producers Cooperative Union (ACPCU), Kabwohe Municipality, Uganda. The study addressed persistent performance challenges, including low profitability, stagnant market share, and high employee turnover. Guided by Equity Theory, Social Exchange Theory and Best Fit Theory, the study adopted a critical realist paradigm and a convergent parallel mixed-methods design. The target population comprised 250 employees, from whom 152 respondents were sampled using the Krejcie and Morgan table. Quantitative data were collected using structured questionnaires, while qualitative data came from key informant interviews and document review. Of the 152 questionnaires distributed, 150 were returned, yielding a 98.6% response rate. Quantitative data were analysed using descriptive statistics, correlation and regression, while qualitative data were analysed thematically. Findings revealed a significant positive relationship between employee compensation and organizational performance (r = 0.502, p = 0.001). Regression results indicated that compensation significantly predicted organizational performance (B = 1.130, β = 0.390, t = 5.95, p = 0.001), explaining 53.2% of its variance. HR policies strengthened this relationship, increasing explained variance to 67.0%, while the interaction model explained 72.1% (ΔR² = 0.051, p = 0.001). Qualitative and documentary evidence corroborated these findings, particularly regarding salary fairness, benefits, bonuses, transparency, performance appraisal and retention. The study concludes that equitable compensation, supported by effectively implemented HR policies, enhances organizational performance. It recommends periodic salary reviews, performance-based incentives, employee welfare benefits, and continuous monitoring of HR policies.

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