Compensation strategy


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Compensation strategy

  1. 1. By: Abdul Wasi
  2. 2. 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)
  3. 3. 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)
  4. 4. Problem Statement To determine Compensation strategy and its Effect on employees retention in Baking Sector of Peshawar
  5. 5. Literature ReviewArticles AuthorsThe effect of compensation and Marcco ven Harppen, Kees coolsperformace measurement onmotivationHow Changes in Compensation Plans Yomna L.Y, Anne Wu and MathewAffect Employee Performance, MaynardRecruitment andRetention—AnEmpirical Study of A Car DealershipPractical Retention Policy for the Robert P. Steel, Rodger W. Griffeth,Practical Manager [and Executive Peter W. Hom and Daniel M.Commentary] LyonsReviewedOrganizational Culture and Employee John E. SheridanReviewedRetention
  6. 6. ContinuedArticles AuthorsThe Retention of Newcomers in Financial Paul A. Gersok, Stephen J. Michin, 1997institutions of Second- and Third-TierCanadian Cities Author
  7. 7. Theoretical Framework Compensation Employees strategy retention
  8. 8. Operational Definition Compensation  Employees Retention Strategy  Low Turnover High Performance  Goals and objectives Motivation  Productivity Interest in work
  9. 9. 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.
  10. 10. 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.
  11. 11. 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.
  12. 12. 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.
  13. 13. 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.
  14. 14. 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.
  15. 15. Methodology Population: All the private bank of Peshawar Sample: 100 employees Sampling Technique: Simple random sampling
  16. 16. Methodology Data collection: Observations, Interviews, Questionnaire. Data Analysis: In Spss correlation will be run.
  17. 17. Limitation of the research Its results can only be applied to service oriented organization. Time Non-cooperative employees.
  18. 18. 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.
  19. 19. Thank you