| Form of studies |
Bachelor |
| Title of the study programm |
Management in international business |
| Title in original language |
Saistība starp darbinieku pozīcijas saglabāšanas indeksu un darbinieku atlīdzību |
| Title in English |
Relationship Between Employee Retention Rate and Employee Compensation |
| Department |
01B00 Riga Business School |
| Scientific advisor |
Inese Muzikante |
| Reviewer |
Zanda Vipule |
| Abstract |
The Bachelor Thesis “Relationship Between Employee Retention Rate and Employee Compensation” by Jekabs Malmanis is the final individual research for Riga Business School’s Bachelor of Business Administration program. The thesis explores whether an increase in monthly compensation has an impact on employee retention. The research methodology includes secondary research of relatable existing academic studies and statistical data analysis to comprehend employee retention variability.
The secondary research examines existing academic literature on the topic of compensation and its contribution to stimulating employee tenure at an organization. Studies conclude that there is an observable correlation between the two variables. Yet, the studies do not include an exact correlation and description of the relationship. Hence, a new statistical analysis was developed to provide numerical findings of the relationship. The primary influence on an employee's duration at a company is argued to be the appreciation of the time and resources invested. This translates to human resource management practitioner's applied practices which entail compensation practices, job security, and the working environment. Employee retention is discussed as an important factor for companies to avoid inquiring additional costs as employees hold knowledge of real experience in a particular field and working environment. With high-turnover companies would have to invest resources in recruiting, training, and time for an employee to adjust to the environment. Moreover, the secondary research examines compensation influencing factors that are connected with employee tenure changes. Subsequently, the research explores the potential relationship mentioned in other studies with statistical analysis of employee tenure and monthly compensation correlation.
A publicly available dataset with 1470 data points originating from IBM datasets was amassed. First, summary statistics about the data and afterward inferential analysis including correlation, multicollinearity, and multiple linear regression were performed and interpreted. Results of the statistical analysis suggest that the cointegration analysis corroborates a positive, yet weak relationship between employee tenure and compensation and it implies that the data is statistically significant and reliable for such research purposes. Hence, it can be comprehended that employees can be retained for an extended period by increasing their monthly compensation. Therefore, the interpreted findings indicate that compensation holds a significant impact on employees’ duration of their stay, contrary to studies that have found otherwise.
Based on the research findings, it is evident that the study offers insights and evidence regarding the connection between employee tenure and their compensation recommending companies consider increasing their employees' monthly compensation as a strategy for improving their retention. This could be achieved by offering regular salary increases or bonuses based on performance evaluations. Evidently, the research constitutes theoretical implications of significant importance as it contributes to the ongoing debate about employee retention and its effects on it by altering the monthly compensation.
The discoveries recommend that further research should focus on what kind of compensation and how regular increases in base salary have the most significant impact on employee retention. Even though the data is considered significantly credible, it is vital to acknowledge research limitations in regard to the dataset lacking essential information about the point in time, when the dataset was created for estimating other economic factors that may have altered the circumstances and therefore, proving the research less plausible without certain economic conditions.
The aforementioned bachelor thesis consists of 35 pages, 3 tables, 1 figure, and 80 academic literature sources. |
| Keywords |
darbinieku noturēšana uzņēmumā, atlīdzība, atlīdzības stratēģijas, darbinieku ieguvumi |
| Keywords in English |
employee retention, compensation, compensation strategies, employee benefits, total rewards |
| Language |
eng |
| Year |
2023 |
| Date and time of uploading |
14.04.2023 16:51:53 |
