IMPACT OF REWARD MANAGEMENT ON EMPLOYEE RETENTION THIS RESEARCH PROJECT REPORT IS SUBMITTED AS A PARTIAL FULFILLMENT OF THE CHARTERED QUALIFICATION IN HUMAN RESOURCE MANAGEMENT IN THE INSTITUTE OF PERSONNEL MANAGEMENT SRI LANKA (INC.)

Abstract

The purpose of this study is to examine the impact of reward management on employee retention in XYZ pharmaceuticals Limited Sri Lanka team. 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, 80 respondents were selected from 100 employees of XYZ Pharmaceuticals Sri Lanka team working around all areas in Sri Lanka. Out of which 80 respondents had properly completed and retuned the questionnaires. XYZ pharmaceuticals Sri Lanka team has recently suffered from losing good talents to other organizations; a situation which motivated the carrying out of this study with a view to recommend solutions to this challenge. This study sought to investigate the impact of reward management on employee retention in the XYZ pharmaceuticals Sri Lanka team. The objective of the study was to examine whether direct financial compensation, career development and work-life balance have any relationship with employee retention in the XYZ pharmaceuticals Sri Lanka team. Human capital theory, Equity theory, Expectancy theory and Two-Factor theory guided this study. The study was based in XYZ pharmaceuticals Sri Lanka team and adopted a descriptive survey research design. 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 discussed common and prospective causes for a person to leave his work, as well as the issues that an organization faces as a result of excessive employee turnover alsorevealed that most of the respondents were not satisfied with DF compensation system of the company. The CD opportunities that exist in the company are not also encouraging. Majority of the respondents are happy with the WLB practices in the company. It is critical for management to design reward systems that are based on employee expectations, similar to market packages, fair, equitable, and consistent, and include both monetary and nonmonetary awards that can motivate employees to stay with the company. The research goes into great length on areas of employee retention like as training, skill recognition, and career growth.