WAGE AND SALARY COST IMPACT ANALYSIS: EVIDENCE FROM FINANCIAL PERFORMANCE OF NIGERIAN QUOTED MANUFACTURING FIRMS
- Financial performance,
- Human resource cost,
- Nigerian firms
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This study examined the impact of human resource cost on financial performance of quoted manufacturing firms in Nigeria. An ex-post facto research design was adopted to constitute panel data for a period spanning 2008-2017. Wage and salary cost, return on equity and earnings per share served as proxies for the study variables. The population comprises 20 firms, which were all selected. Their financial statements, which are contained in Nigerian Stock Exchange publications, formed the secondary data for analysis. The results featured in terms of Correlation Coefficient (R), Coefficient of Determination (R2),T-test,F-test, Auto-correlation test, and Granger Causality test values. The first null hypothesis was rejected (1.660 critical t-value at 0.05 < 2.421 computed t-value), in favour of the alternate hypothesis, which states that wage and salary cost has significant impact on return on equity. Similarly, the second null hypothesis was rejected (1.660 critical t-value at 0.05 < 2.968 computed t-value), in favour of the alternate hypothesis, which states that wage and salary cost has significant impact on earnings per share. By this, it is established that human resource cost has significant impact on financial performance of quoted manufacturing firms in Nigeria. It is, therefore, recommended that the firms should provide attractive compensatory and incentive packages in order to boost human resource productivity and consequently stimulate corporate financial performance. Also, more recognition should be accorded investment – portending costs, while the routine expenses should be treated with greater managerial prudence.
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