Pages: (119-130 )
Abstract
Employee retention problems have been seen to be a challenging task due to improper compensation management and practice. EIt provides ways in which employers can reward their employees accordingly.Theoretical study was conducted to investigate the effect of compensation management practice and employee retention. The Herzberg Two Factor theory and Resource-Based View Theory were the underpinned theory used for Compensation Management while March and Simon Theory was used for Employee Retention.Thus, a conceptual model was developed to show the interaction between compensation management practice (independent variable) and employee retention (dependent variable). The comparison of literatures showed that compensation management practice has significant effect on employee retention, both directly and indirectly as it motivates employees to stay with their jobs.This paper will help both the academics and those managing human resource to realize, understand and see the effect of compensation management practice on employee retention.
Keywords: Compensation management practice, Employee retention,Extrinsic compensation,Intrinsic compensation.,