Effect of Compensation Administration on Employees’ Retention

Abstract

Bearing in mind that employees are the most valuable assets in modern organizations, this study examines the relationship between compensation administration and employee’s retention. The population of the study comprises 70 full-time employees of hotels and restaurants in Niger State, Nigeria. Using a five-point Likert scale, a self-administered questionnaire was used to obtain data from the participants. Also, the study adopts simple random sampling to give equal chance to all the participants. The Statistical Packages for Social Sciences (SPSS version 25) was employed for data analysis. Findings indicate a positive relationship between effective compensation administration and company’s ability to retain its employees. More so, statistical result demonstrates a positive relationship between payments of salary and allowances and employees’ intention to remain in the organization. This study recommends a robust compensation administration to enable organizations retain their best hands who may intend to quit. This is because a good compensation system helps to retain and enhance employee’s job satisfaction and decision to remain in the organization. In conclusion, the need for effective compensation administration cannot be over-emphasized as it is essential for employee’s retention. Implications and suggestions for future research are presented at the end of this study.