Financial Compensation and Voluntary Turnover

Financial Compensation and Voluntary Turnover

In a study of employee retention in a professional service firm in South Africa,

Adewuyi (2012) found generational similarities and differences in prioritization of

employee voluntary turnover drivers among Generation Y, X, and Baby Boomers.

Findings show that majority of Generation Y rank financial compensation as the driver

for employee voluntary turnover compared to Generation X and Baby Boomers. In a

study of senior and junior managers in pharmaceutical companies in South Africa,

Khoele and Daya (2014) found that money was the key driver of employee voluntary

turnover among Generation X.

employee compensation and employee voluntary turnover in small businesses among

Safaricom dealers in Eldoret municipality, Kenya. Among the different types of

compensation alternatives, the study found a significant association between merit

pay, travel/meal/house allowance and medical allowance employee turnover. Despite

the popularity of base pay and commissions compensation alternatives, they were not

significantly related to employee turnover.

Career Development Opportunities and Voluntary Turnover

Weng and McElroy (2012) conducted a study on organizational career growth,

affective occupational commitment and employee voluntary turnover intentions. The

study found negative relationship between organizational career growth and employee

In a study of the banking sector in Kenya, Kariuki (2015) found a strong significant

supervisor, and performance evaluations all have adverse effects on employee

voluntary turnover. Ndung’u and Omondi (2015) conducted a study on the

relationship between talent management practices and employee turnover. The study

found a negative correlation between staff training strategy and employee voluntary

turnover.

Biswakarma (2016) conducted a study on organizational career growth and

employees’ turnover intentions. The results indicate the organizational career growth

dimensions negatively related to employees’ voluntary turnover intentions.

Furthermore, none of the demographic variables (gender, age, education, marital status

and position) are significantly moderating the phenomenon. It was also found that

variables such as employee attribute work-life balance, financial compensation, and

career development. The influence of the independent variables on employee

voluntary turnover reported mixed results in significance of their relationship. This

study sought to contribute to clarity on the inconsistencies.

Secondly, most studies that have explored employee attribute, work-life balance,

financial compensation, and career development as determinants of employee

voluntary turnover were conducted in geographical contexts of Africa and the world.

Further, where studies were conducted in Kenyan context, there is limited focus on

industry sectors such as professional audit firms and where such was the case, there

were hardly recent studies published. Considering the uniqueness of policy contexts

independent variables and employee voluntary turnover focusing on the Kenya context

depiction of the major variables of the study. The framework helps the reader to

quickly see proposed relationships between the variables in the study and shows the

same graphically or diagrammatically.

Voluntary Employee turnover is the dependent variable in this study. Voluntary

turnover was operationalized as intention to leave. The independent variables are

employee attributes, work life balance, financial compensation and career

development.

Figure 2.1 Conceptual Framework

Dependent Variable

Independent Variables

Salaries

Bonuses

Work life Balance

Work schedules

Employee

Voluntary

Turnover

Employee Attributes

Age, Gender, Education level, Tenure

in position

Source: Author (2018)

years in the position with the organization

Qns: 3, 4, 5 & 6

2. Work Life Balance Organization and structuring

of work conditions in terms

of working schedules/ /hours

Working within scheduled working hours

Qn 7: 1-4

3. Financial

Compensation

Salary and Bonuses, Satisfaction with Salary, availability of

and satisfaction with Bonuses

Qn 8: 1-5

Dependent

Employee Voluntary

turnover

Employee turnover intention Employee’s expression of willingness/

intention to resign, look for another job, or

Q10: 1-4

Abassi, S.M., & Hollman, K.W. (2000). Turnover: the real bottom line. Pub. Pers. Manage.

Abelson, M. A. (2007). Examination of avoidable and unavoidable turnover. Journal

Adams, J. S., & Freedman, S. (1976). Equity theory revisited: Comments and

Alkahtani, A. H. (2015). Investigating factors that influence employees’ turnover

Ampoamah, P., & Cudjor, S. K. (2015). The effect of employee turnover on

Biswakarma, G. (2016). Organizational career growth and employees’ turnover