Compensation strategy and its Effect on employees retention in

Baking Sector of PeshawarBy: Abdul Wasi

Introduction The strong public interest in incentive like

compensation has largely been caused by the great increase in CEO salaries in the late 1990s. (Murphy, 1999)

The effective HRM strategy should balance the cost of replacing employees and cost of retaining employees.(Abelson & Bessinger 1994.)

Compensation strategy has a little and inconsistent effect on employees turnover than other strategies like job enrichment and career development of employee (Terborg and Lee,1994)

Continued… The stronger performers tends to have lower

turnover rates and that’s way easy to retain in the organization compared to weak performer. (McEvoy & Casios 1989)

Problem Statement To determine Compensation strategy and its

Effect on employees retention in Baking Sector of Peshawar

Literature ReviewArticles Authors

The effect of compensation and performace measurement on motivation

Marcco ven Harppen, Kees cools

How Changes in Compensation Plans Affect Employee Performance, Recruitment andRetention—An Empirical Study of A Car Dealership

Yomna L.Y, Anne Wu and Mathew Maynard

Practical Retention Policy for the Practical Manager [and Executive Commentary]

Robert P. Steel, Rodger W. Griffeth, Peter W. Hom and Daniel M. LyonsReviewed

Organizational Culture and Employee Retention

John E. SheridanReviewed

Continued Articles Authors

The Retention of Newcomers in Financial institutions of Second- and Third-Tier Canadian Cities Author

Paul A. Gersok, Stephen J. Michin, 1997

Theoretical Framework

Compensation strategy

Employees retention

Operational Definition Compensation

Strategy

High Performance

Motivation

Interest in work

Employees Retention

Low Turnover

Goals and objectives

Productivity

Hypothesis H1: There is a Relationship between high performance and low

turnover.

H2: There is a Relationship between motivation and low

turnover.

H3: There is a Relationship between disagreement and goals and

objectives.

H4: There is a Relationship between authority and goals and

objectives.

Continued H5: There is a Relationship between unpleasant

communication and sustainability of the organization.

H6: There is a Relationship between unpleasant

communication and goals and objectives.

Scope of the research The research will be carried out in private

bank of Peshawar. The result or findings of the research will be applicable to not only the banks but also to the other likewise organizations.

Purpose of the research The purpose of this research is to investigate

whether compensation strategy effect the employees retention in the third world country city where the unemployment rate is in double digits and substitute is available at even low cost.

Objective of the research To know the effect of compensation on

employees retention.To examine how compensation strategy can

effect employees retention.To know the contribution of compensation

strategy on employee retention.

Significance of the research If compensation has an effect on employees

retention then the management will try to use more and more of the resources on strategies like this by offering e.g. Health insurance remuneration and after retirement benefits etc.

Methodology Population: All the private bank of Peshawar Sample: 100 employees Sampling Technique: Simple random

sampling

Methodology Data collection: Observations, Interviews,

Questionnaire.

Data Analysis: In Spss correlation will be

run.

Limitation of the research

Its results can only be applied to service oriented organization.

Time

Non-cooperative employees.

References Macro van herpen, m. v. (2003). the effects of

performance measurement and copmensation and motivation. tinbergen institute , 1-39.

joana l y ho, a. w. (2002). how change in compensation plane affect employee performance,recruitment and retention.

Thank you