Employees’ Compensation Packages and Profitability of Consumer Goods Firms in Nigeria

Abstract

The study examined the effect of wages and salaries, bonuses and incentives, and training costs on the return on capital employed of sampled consumer goods firms in Nigeria. Data were collected from annual financial reports of the firms for the period, 2013-2022. The research adopted an ex-post facto research design. The systematic Sampling technique was used to select a total of four (4) companies for the study. The analytical tool used for the study was ordinary least square multiple regression. Results of the test of hypotheses indicate that Wages and Salaries have a negative but significant effect on Return on Capital Employed. Bonuses and Incentives have a negative and insignificant effect on the Return on Capital Employed however; training Cost has a positive and significant effect on the Return on Capital Employed of consumer goods firms in Nigeria. The study suggests that Wages and salaries should not be higher than the value addition made by the employees and labourers, rewards should be directly related to performance and as wanted by the recipient and Training of staff is very pertinent to a company’s overall success.