RELATIONSHIP BETWEEN COMPENSATION, TRAINING, SUPERIOR-SUBORDINATE RELATIONSHIP AND EMPLOYEE RETENTION: A CASE ON A HOSPITALITY ORGANIZATION IN MALAYSIA

Abstract

Retaining employees is a major challenge for employers regardless of industries. Retention plays an important role for any organization because employees’ knowledge and skills are central to companies’ ability to be economically competitive. This study explores the main factors affecting retention in a particular organization. The organization taken into consideration is in a hospitality industry which is owned by a state economic corporation within Klang Valley area. The factors examined were compensation, training and superior-subordinate relationship. Applying simple random sampling technique, quantitative data was collected using the self-administered questionnaire that consist of questions with 5-points Likert scales distributed to samples of 97 employees in the organization. The employees are holding various positions from non-executive to managerial levels. The data collected was analysed using Pearson Correlation and Multiple Regression Analysis to establish relationship between different variables. Based on the results, compensation, training and superior-subordinate relationship have moderate significant positive relationship to employee retention; compensation r=0.605** (p<0.01); training r=0.565** (p<0.01); superior-subordinate relationship r=0.514** (p<0.01). This study also found that compensation is the factor that affects employee retention the most as it has the highest beta coefficient with β= 0.385 (p=0.000, p<0.05). This indicates that this hospitality organization has to focus on the compensation policy not just on the financial aspect but also non-financial as part of their retention management strategies.