Impact of Training and Compensation Practices on Performance of Small and Medium Sized Manufacturing Enterprises

Organizations cannot get candidates who exactly match with the job and the organizational requirements. Hence training is important to develop the skills of employees and make him suitable for the job. Every organization small or large, old or newly started should provide training to all employees irrespective of their qualification, skill, appropriateness for the job etc. Compensation is one of the extrinsic practices of human resource function in an organization. Basic salary is included under direct compensation, while benefits are included under indirect compensation and may consist of health insurance, the employers' contribution to retirement, pay for illness. The questionnaire was developed and measured by using a five point Likert scales ranging from strongly disagree to strongly agree. ANOVA and Chi-square test was used to examine the impact of formal and informal adoption of training and compensation practices on organizational performance. The results revealed that there is an association between those organizations who adopt formal or informal training and compensation practices with financial performance of small and medium sized enterprises. Also the results shows that there is a significant difference in the mean agreeability scores on financial performance of SMEs and the mean agreeability scores are high among the enterprises that adopt formal training and compensation practices