Being thesis submitted in the department of business administration and marketing, school of management

4.2.4.1. Test of Hypothesis Four

Hypothesis Four (H₀₄): Performance Appraisal will not have any significant influence on corporate entrepreneurship.

In order to test hypothesis four (4), Pearson Product Moment Correlation (PPMC) was used. Data on performance appraisal was obtained from combining questionnaire items on performance appraisal (B25-B30), while data on corporate entrepreneurship variable were formed from the combination of questions relating to proactivity dimension of corporate entrepreneurship (B50 – B54), innovation dimension of corporate entrepreneurship (B55 – B62), and risk taking dimension of corporate entrepreneurship (B63 – B67). Table 4.15 presents the summary result of the correlation analysis below:

Table 4.15: Pearson product moment correlation on the relationship between performance appraisal and corporate entrepreneurship

		Corporate Entrepreneurship	Performance Appraisal (PA)
Corporate Entrepreneurship	Pearson Correlation	1	.542^**
	Sig. (2-tailed)		.000
Performance Appraisal (PA)	Pearson Correlation	.542^**	1
	Sig. (2-tailed)	.000
**. Correlation is significant at the 0.01 level (2-tailed).

Source: Field Survey Result, 2016

Interpretation

Table 4.15 shows the result of Pearson Product Moment Correlation (PPMC) to test hypothesis four. The result reveals that there is a significant positive relationship between performance appraisal and corporate entrepreneurship (r = 0.542). The relationship is statistically significant (Sig. = 0.000) at 0.01 level of significance. This implies that performance appraisal is a function of corporate entrepreneurship. Furthermore, the positive relationship implies that the higher the level of best practices of performance appraisal being embraced, the higher the level of corporate entrepreneurship in the selected institutions.

Decision

Based on the results, the null hypothesis four (H₀₄) which states that performance appraisal will not have any significant influence on corporate entrepreneurship is rejected. Therefore, it can be concluded that performance appraisal has a significant influence on corporate entrepreneurship in the selected organizations.

4.2.4.2. Discussion

The fourth hypothesis which states that performance appraisal practice has no significant influence on the corporate entrepreneurship was designed to investigate the effect of the performance appraisal practices on corporate entrepreneurship in the civil services and banking industrial sectors operating in Lagos and Ogun States of Nigeria. The result showed that performance appraisal has a significant effect on the level of corporate entrepreneurship in the selected public and private institutions in these two States. This suggests that performance appraisal activities can be a tool for promoting corporate entrepreneurial behaviour among staff.

This finding is in line with Dizgah et. al (2011), Edralin (2010), Hayton (2005) and Damanpour, (1991). Damanpour (1991) has contended that firms can use performance appraisal as a means of motivating staff commitment to get involved in creative thinking and innovation. This, according to Jaw and Liu (2003), can result when performance appraisal scores are used to create gentle pressures of challenge as well as a feeling of achievement in innovative activities. Dizgah et al (2011) reported that performance appraisal is positively related to corporate entrepreneurship in ninety three (93) small and medium scale enterprises in the Guilan province of Iran. In like manner, Permattila-Aliqvist and Mikael (2001) study found strong association between performance appraisal and corporate entrepreneuship. Brizek (2014), in his investigation of the role of performance appraisal in promoting corporate entrepreneurship, describes it as one which balances individual group orientation, emphasizes effectiveness over efficiency, result orientation, include innovation and risk taking criteria and tolerance of failure to factors which fosters the creation of entrepreneurial work environment.

4.2.5. Restatement of Research Objective Five and Research Question Five.

Objective 5. Evaluate the influence of compensation practices on corporate entrepreneurship

Question 5. What is the influence of compensation practices on corporate entrepreneurship?

Table 4.16. Respondents’ Responses On Compensation Management Practices

Compensation Management
S/ N	To what extent would you say that your establishment adheres to the following:			NE 1	VLE 2	LE 3	ME 4	GE 5	VGE 6	Mean	SD
1.	Your establishment properly measures and acknowledges extra work		Freq	40	74	81	219	350	162	4.35	1.324
			Per%	4.3	8.0	8.7	23.7	37.8	17.5
2.	Your establishment adequately compensates extra work		Freq	54	102	99	172	301	200	4.25	1.481
			Per%	5.8	11.0	10.7	18.5	32.4	21.6
3.	Your establishment has a system for tracking and recognizing achievement at every level		Freq	1	29	72	92	197	387	4.38	1.269
			Per%	.1	3.1	7.8	9.9	21.3	41.8
4.	Your establishment provides financial rewards other than salary		Freq	67	103	106	181	330	135	4.09	1.467
			Per%	7.3	11.2	11.5	19.6	35.8	14.6
5.	Your establishment offers incentive or variable pay (i.e. pay related to actual work done)		Freq	64	110	107	194	327	117	4.10	2.216
			Per%	7.0	12.0	11.6	21.1	35.6	12.7
6.	Your establishment offers flexible benefits that are tailor-fit to meet the diverse needs of the employees		Freq	60	90	113	204	313	147	4.19	1.448
			Per%	6.5	9.7	12.2	22.0	33.8	15.9
7.	Your establishment gives cash or other incentives to recognize good performance and to encourage employees		Freq	60	90	113	204	313	147	4.14	1.430
			Per%	6.5	9.7	12.2	22.0	33.8	15.9
8.	Your establishment offers high packaged fringe benefits that can be converted to cash or have monetary values		Freq	68	118	146	183	244	166	4.04	2.240
			Per%	7.4	12.8	15.8	19.8	26.4	17.9
9.	Your establishment provides profit sharing programme or performance related benefits alternatives		Freq	62	147	132	164	263	163	3.98	1.535
			Per%	6.7	15.8	14.2	17.6	28.2	17.5
10.	Your establishment recognizes results with enthusiasm		Freq	28	75	108	232	353	125	4.28	1.251
			Per%	3.0	8.1	11.7	25.2	38.3	13.6
Grand Mean		4.182178

Source: Field’s Survey, 2016

Interpretation

Table 4.16 shows the respondents’opinion on different aspects of compensation management practices in their establishments as related to best practice. Specifically, 79% of the respondents accepted that their establishments properly measures and acknowledges extra work (Mean = 4.35, Standard deviation = 1.324), 72.5% believe that their establishments compensate extra work (Mean = 4.25, Standard deviation = 1.481), 73% said that their organizations has a system for tracking and recognizing achievement at every level (Mean = 4.38, Standard deviation = 1.269), 70% considers that their establishment provides financial rewards other than salary (Mean = 4.09, Standard deviation = 1.467). 69.4% believe that their establishments offer incentives or variable pay that are related to work done (Mean = 4.10, Standard deviation = 2.216), 71.7% accepted that their establishments offers flexible benefits that are tailors-fit to meet the diverse needs of the employees (Mean = 4.19, Standard deviation = 1.448), 71.7% believe that their organizations gives cash or other incentives to recognize good performance and encourage employees (Mean = 4.14, Standard deviation = 1.430). 64.9% accept that their establishment offers high packaged fringed benefits that can be converted to cash or have monetary values (Mean = 4.04, Standard deviation = 2.240), 63.3% are of the opinion that their establishments provides profit sharing programme or performance related benefits alternatives (Mean = 3.98, Standard deviation = 1.535), while 77.1% considers that their establishments recognize results with enthusiasm (Mean = 2.72, standard deviation = 1.251).

Table 4.4 earlier referred suggest that the respondents believe that, on the whole, employees in both banking and civil services in Lagos and Ogun States exhibit corporate entrepreneurial work behavior with a grand mean of 4.0979. The mean of the responses to each of the items is greater than 3.5 which is the bench mark for the acceptance of the particular entrepreneurial behavior as present in the organization.

Table 4.16 shows that the respondents accept that, compensation management activities in their respective institutions conform to best practices, with grand mean being 4.182178 which is greater than the bench mark mean of 3.5. When we compare this in terms of closeness to the result of Table 4.4 on corporate entrepreneurship with mean 4.097922, one can deduce that there is a positive relationship between compensation practices and corporate entrepreneurship, suggesting the possibility of a cause and effect between them. This has therefore assisted us to achieve our objective five (5) by answering our research question five (5). This is now tested below.

4.2.5.1. Test of Hypothesis five:

Hypothesis Five (H₀₅): There is no significant relationship between compensation management practices and corporate entrepreneurship.

Pearson Product Moment Correlation (PPMC) was used in testing hypothesis five. Data on compensation ma nagement practices was obtained from combining questionnaire items on compensation practices (B15-B24), while data on corporate entrepreneurship variable were formed from the combination of questions relating to proactivity dimension of corporate entrepreneurship (B50 – B54), innovation dimension of corporate entrepreneurship (B55 – B62), and risk taking dimension of corporate entrepreneurship (B63 – B67). Table 4.17 presents the summary result of the correlation analysis.

Table 4.17: Pearson product moment correlation on the relationship between compensation management practices and corporate entrepreneurship

		Corporate Entrepreneurship	Compensation management Practices(Com)
Corporate Entrepreneurship	Pearson Correlation	1	.618^**
	Sig. (2-tailed)		.000
Compensation management Practices (Com)	Pearson Correlation	.618^**	1
	Sig. (2-tailed)	.000
**. Correlation is significant at the 0.01 level (2-tailed).

Source: Field Survey Result, 2016

Interpretation

Table 4.17 reports the result of Pearson Product Moment Correlation (PPMC) analysis examining the relationship between compensation management practices and corporate entrepreneurship. The analysis was to test hypothesis five (5). From Table 4.17, the correlation between compensation management practices and corporate entrepreneurship is 0.618 which is significant at 0.01 level (r = 0.618, p <0.05).This implies that there is a significant relationship between compensation practices and corporate entrepreneurship in the selected institutions in Lagos and Ogun State of Nigeria.

Decision

Based on the results of the Pearson Product Moment Correlation (PPMC) analysis, the null hypothesis five (H₀₅) which states that there is no significant relationship between compensation practices and corporate entrepreneurship is rejected. Therefore, it is concluded that compensation management practices have a strong and significant positive influence on corporate entrepreneurship in the selected organizations.

4.2.5.2. Discussions

The fifth hypothesis of this study seeks to determine if there is a significant relationship between compensation management practices and corporate entrepreneurship among workers in the civil services and banking services institutions operating in Lagos and Ogun States respectively. As shown above, the findings revealed that compensation practices have a strong positive and statistically significant relationship with corporate entrepreneurship.

This is in line with Morris and Tones (1993), who found a positive relationship between compensation management practices and corporate entrepreneurship in 112 firms across many industries. Parbhoo (1997) also contended that the human resource system, especially the reward and compensation system plays a vital role in creating a climate conducive to corporate entrepreneurial activities. However, Dizgah et al (2011) investigation of the relationship between high performing human resource management practices and corporate entrepreneurship among 93 small and medium sized entrepreneurial firms in the Ginlan province of Iran, reported a negative relationship between these two variables. This stands in contrast to our finding and, according to Dixon, (2004) and Burton (2001), points to the motivational crisis being experienced in established firms in their attempt to motivate entrepreneurial work behavior through monetary compensation. Infact, to Scheepers (2009), most compensation and reward system are not designed to promote corporate entrepreneurship. However, he stressed that, employees’ willingness and ability to engage in entrepreneurial work behavior are mainly influenced by the type of rewards and reinforcement offered to employees, rather than just any reward.

A possible explanation of the contrasting contention of Dizgah, et al (2011) is that of Caugh, Cox and Comp (2004) that the role of compensation in entrepreneurial work behavior may depends on how it is viewed by employees and used by the employers. That is, the impact of reward depends on the type, design and how it is being viewed, not just as a monetary compensation. For example, Horneby, Kwatoko and Muntagno (1999) studies show that there is positive relationship between compensation practices and corporate entrepreneurship only when the reward was considered as appropriate, thus admitting the fact that reward could be associated with corporate entrepreneurship when considered appropriate. This is in line with our findings and harmonises with that of Dizgah (2011) appa rent contradictory findings. Responses of our respondents like “ organizations has a system for tracking and recognizing achievement at every level (Mean = 4.38, Standard deviation = 1.269), and that their “establishments offers flexible benefits that are tailors-fit to meet the diverse needs of the employees” (Mean = 4.19, Standard deviation = 1.448), are evidences suggesting that, like in the Dizgah (2011) studies, compensation offered by organizations in our study are those considered appropriate, thus capable of motivating entrepreneurial work behavior.

Further, in this respect, Madu (2011) who found a positive relationship between compensation practices and corporate entrepreneurial work behavior says that this relationship is dependent on what was measured and how the measures are used and rewarded. A basis for this is the argument of Kerr (1995) that most creatures look for clues concerning what activities are rewarded, and then act accordingly. In line with this logic, Madu (2011) explained that system of reward that measures and rewards innovative work behavior will produce entrepreneurial workforce, while the one that focused on preventing and punishing failure will inhibit it. In support of this, Kanto (1989) and Goosan, Der-Coning and Smith (2002) show that reward system that measures and reward innovative work behavior would generate the motivation of individuals to engage in moderate risk taking, proactive, innovative and work behaviour. Therefore, the issue is not whether or not compensation practices can influence corporate entrepreneurship, but which compensation strategy would motivate entrepreneurial work behavior. From the discussion so far, it is about how appropriate and appropriately used is the compensation management practices. Thompson, Strickland and Gamble, (2005) in Scheepers (2009) argued that one of the complexities managers face in executing an entrepreneurial strategy is the selection and use of reward that builds commitment to entrepreneurial goals among employees. Scheepers (2009) investigated the reward system which firms use to motivate their staff to act entrepreneurially. The investigation was carried out through the analysis of responses of chief executive officers and marketing managers of two hundred and twenty five (225) ICT and service firms, gathered through a cross-sectional telephone survey.
The result showed that money is not the most important motivator of entrepreneurial behavior. They found that these firms tend to focus more on formal acknowledgement, social incentive and organizational freedom of the employees. However, the firms use more of social incentive which, according to this study, includes actions such as special recognition for excellent performance, increasing job responsibilities, managers helping employees to navigate obstacles to corporate entrepreneurship and managers telling his or her superior of excellent performance, as also emphasized in Barrier (1996). In the same veins, Bau and Dowling (2007) stressed that these entrepreneurial firms used differential reward systems as compared to the more established one. Luthans and Stajkovic (1999) also found that a combination of performance feedback and social attention or recognition mechanisms produced significant impact on employees’ entrepreneurial behavior. This agrees with the contention of Chandler, Keller and Lyon (2000) that reward system could have a significant impact on corporate entrepreneurial activities by offering special recognition for entrepreneurial project, reward tailored to individual achievements, and emphasizing long term performance. Block and Macmillan (2003) added that entrepreneurial firms also use pay-for performance, significant financial rewards for cost-saving ideas and promotion after successful project implementation, thus supporting our findings.