Effect of Reward Management on Employee Retention: The Case of MIDROC- Construction PLC
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Date
2019-06
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Addis Ababa University
Abstract
The purpose of this study is to examine the effect of reward management practice on employee retention in MIDROC Construction Ethiopia Plc. The study focused on three rewards management components that influence retention include; direct financial compensation, career development and work-life balance. The study used quantitative approach and its type was descriptive and explanatory research design. Data was collected through the use of questionnaires. The study used simple random technique and, 297 respondents were selected from1159 employees of MCE working around Addis Ababa. Out of which 260 respondents had properly completed and retuned the questionnaires. Then, the data was analyzed using Statistical Package for Social Science (SPSS), version 20. The study revealed that retention had statistically significant positive and strong correlation with CD, r = 0.512, p < 0.01. This implies that better opportunities for career development have effect on employee retention. There was a moderate significant positive correlation between retention and WLF, r = 0.455, p < 0.01. Similarly, the correlation between retention and DF was moderate and positive, r = 0.417, p < 0.01.Multiple linear regression analysis was computed to assesses the influence of the independent variables on dependent variable. The result indicated that 32.7% of variation in employees’ retention was explained by DF, CD and WLF. Among these independent variables CD has a greater rate of change. The study revealed that most of the respondents were not satisfied with direct financial compensation system of the company. The career development opportunities that exist in the company are not also encouraging. Majority of the respondents are happy with the work life balance practices in the company. It is important for the management to develop reward systems that is based on expectation of employees, comparable with market packages, fair, equitable and consistent, in the form of both financial and non-financial rewards that can persuade employees to remain in the organization
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reward management, direct financial compensation, career development