Influence of Compensation, Performance Feedback on Employee Retention in Indian Retail Sector

Abstract

The present article investigates the influence of compensation plans – financial as well as nonfinancial and performance feedback – with respect to the retention of the employee considering the retail sector in India from viewpoint of employees. A structured questionnaire was employed to gather information from the Hyderabad city and Greater Hyderabad Municipal Corporation (GHMC) consisting of 571 retail outlet employees as sample respondents. The collected data was analyzed using structural equation modeling (SEM) to assess the hypothecated relationship among financial that is, extrinsic rewards (FR), non-financial that is, intrinsic reward (NFR), performance feedback (PF), and employee retention (ER). The findings reveal that intrinsic and extrinsic benefits portray an important role in performance feedback (PF) which in turn helps the organization to retain their employees for years to come. The study offers academia and practitioner a thoughtful and insightful understanding of some of the important aspects of keeping skillful and talented performers and ultimately increasing productivity and providing a competitive advantage to the organization.