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ABSTRACT
The present study investigated the relationship between compensation, promotional opportunities and employees' retention. Survey was used to collect data from 220 faculty members working in public sector universities in Pakistan. Partial Least Squares PLS path modeling was employed to analyze data. The results revealed that compensation and promotional opportunities had imperative relationship with employees' retention. Moreover, the results also revealed that work environment moderates the relationships between compensation and employee retention and promotional opportunities and employee retention. Finally, the implications, limitations and recommendations for further research were discussed.
JEL Classification: E24; J21; M51.
Keywords: Compensation; Promotional Opportunities; Employees' Retention.
1.INTRODUCTION
The most precious asset of an organization is its employees. Hence, retaining these employees is highly necessary for the success of these organizations (Ng'ethe, Iravo & Namusonge, 2012; Osteraker, 1999). Employee retention is defined as the process through which the organization encourages employees to stay for longer period of time or until the completion of a project, it benefits both the employee and the organization (Akila, 2012). Employees' retention is important for organizations because the cost of replacing and re-training new employees is very costly (Irshad & Afridi, 2010), especially for those who are highly talented and possesses specialized skills that are hard to get. There have been considerable number of studies regarding the education system and institutions from management and economic points of view (Kreishan & Al-Hawarin, 2011; Bulut & Sayin, 2010; Katircioglu, 2010; Katircioglu et al., 2014; 2010; Ozsagir et al., 2010; Misra, 2009; Vural & Gulcan, 2008). But further studies are needed with this respect. On the other hand, for an academic institution, its most talented and highly skilled employees are the faculties. Committed and competent faculties are valuable to an institution because they can ensure that good education is being delivered to the clients (i.e. students). This is important because it increases the reputation of the institutions, which in turn lead to the successful future of not only the institution, but also the students and overall economy (Echevarria, 2009).
However, retaining talented faculties is not easy, especially in the current economic conditions, whereby all academic institutions are competing for faculties at the global level. For example, a university in the USA, University of Wisconsin-Madison, reported in 2016 that they...