Impacts of Performance-based Pay on Employee Productivity; Mediated by Employee Training

Abstract

Employee productivity plays a vital role in the success of SMEs. Numerous factors affect employee productivity including performance-based pay and training programs. This study focused on finding the direct path relationship of performance-based pay and employee training concerning employee productivity. Furthermore, the study examined the indirect path effects of performance-based pay through employee training towards employee productivity. Two hundred thirty employees of SMEs were selected to respond to the structured questionnaire. Findings of the study revealed the positive relationship among performance-based pay, training and employee productivity. Also, the positive mediation of employee training was examined in the present study between the relationship of performance-based pay and employee productivity. The present study has substantial practical implications for SMEs.

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