Compensation System and Employees’ Retention in Hormuud Telecom Somalia

ABSTRACT The researcher studied compensation system and employees’ retention in Hormuud Telecom Somalia (HORTEL). The basic objectives of this study were to find out the employee retention level of HORTEL, to determine the relationship between performance-based pay and employee retention of HORTEL and to examine the relationship between seniority-based pay and the retention of the employees of HORTEL. Data was collected through questionnaire both from employees and managers of HORTEL with total sample size of one hundred (100) from accessible population of one hundred and twenty five (125). Pearson Correlation was used for measuring the relationship between compensation and employees’ retention, frequency tables were also used. Further the findings of the study showed that all of the employees were male; and most of the employees were young in age and most of them had bachelor degree. The findings also showed that the employee retention level was high. The results of correlation indicated a significant relationship between compensation system and employees’ retention particularly performance-based pay and employees’ retention. Based on the results HORTEL should hire female employees and HORTEL should send their employees for further study, because all of its employees were male and significant numbers of the employees were secondary certificate holders. HORTEL should maintain keeping their employees and should be aware of the cost of turnover and it should bring policy and strategies which will keep the company staff longer. HORTEL managers should continue with paying for performance. On the other hand managers of HORTEL should try to increase the relationship of seniority-based pay and employee retention by giving employees seniority based pay such as opportunities for growth and development and retirement benefits to the retired employees.

TABLE OF CONTENTS

Chapter Page

One THE PROBLEM AND ITS SCOPE 1

Background of the Study 1

Statement of the Problem 3

Purpose of the Study 4

Research Objectives 4

Research Questions 5

Hypothesis 5

Scope 5

Significance of the Study 6

Operational Definitions of Key Terms 6

Two REVIEW OF RELATED LITERATURE 8

Introduction 8

Concepts, Ideas, Opinions From Authors/Experts 9

Theoretical Perspectives 27

Related Studies 28

Three METHODOLOGY 33

Research Design 33

Research Population 33

Sample Size 34

Sampling Procedure 34

Research Instrument 34

Validity and Reliability of the Instrument 35

Data Gathering Procedures 35

Data Analysis 35

Ethical Considerations 36

Limitations of the Study 36

Four PRESENTATION, ANALYSIS AND INTERPRETATION

OF DATA 37

Profile of the Respondent 37

Employee Retention Level of HORTEL 40

Relationship between Performance-based pay

and employee retention of HORTEL 42

Relationship between Seniority-based pay

and employee retention of HORTEL 45

Five FINDINGS, CONCLUSIONS, RECOMMENDATIONS

Findings 48

Conclusions 52

Recommendations 54

References 58

Appendices 62

Appendix I Transmittal Letter 62

Appendix II Informed Consent 63

Appendix III Research Instrument 64

Appendix IV Calculation of content validity index 68

Appendix V Interpretation 70

Researcherts Curriculum Vitae 71