This document discusses compensation strategy and its effect on employee retention in the baking sector of Peshawar. It begins with an introduction and literature review on the topic. It then outlines the theoretical framework, operational definitions, hypotheses, scope, purpose, objectives, significance, methodology, limitations, and references. The methodology section specifies that data will be collected through observations, interviews and questionnaires from 100 employees at private banks in Peshawar using simple random sampling. The data will then be analyzed in SPSS to examine correlations between compensation and retention.

1. By: Abdul Wasi

2. Introduction
 The strong public interest in incentive like
compensation has largely been caused by the great
increase in CEO salaries in the late 1990s. (Murphy,
1999)
 The effective HRM strategy should balance the cost of
replacing employees and cost of retaining
employees.(Abelson & Bessinger 1994.)
 Compensation strategy has a little and inconsistent
effect on employees turnover than other strategies like
job enrichment and career development of employee
(Terborg and Lee,1994)

3. Continued…
 The stronger performers tends to have lower turnover
rates and that’s way easy to retain in the organization
compared to weak performer. (McEvoy & Casios 1989)

4. Problem Statement
 To determine Compensation strategy and its Effect on
employees retention in Baking Sector of Peshawar

5. Literature Review
Articles Authors
The effect of compensation and Marcco ven Harppen, Kees cools
performace measurement on
motivation
How Changes in Compensation Plans Yomna L.Y, Anne Wu and Mathew
Affect Employee Performance, Maynard
Recruitment andRetention—An
Empirical Study of A Car Dealership
Practical Retention Policy for the Robert P. Steel, Rodger W. Griffeth,
Practical Manager [and Executive Peter W. Hom and Daniel M.
Commentary] LyonsReviewed
Organizational Culture and Employee John E. SheridanReviewed
Retention

6. Continued
Articles Authors
The Retention of Newcomers in Financial Paul A. Gersok, Stephen J. Michin, 1997
institutions of Second- and Third-Tier
Canadian Cities Author

7. Theoretical Framework
Compensation Employees
strategy retention

8. Operational Definition
 Compensation  Employees Retention
Strategy
 Low Turnover
 High Performance
 Goals and objectives
 Motivation
 Productivity
 Interest in work

9. Hypothesis
 H1: There is a Relationship between high performance and
low turnover.
 H2: There is a Relationship between motivation and low
turnover.
 H3: There is a Relationship between disagreement and goals
and objectives.
 H4: There is a Relationship between authority and goals and
objectives.

10. Continued
 H5: There is a Relationship between unpleasant
communication and sustainability of the organization.
 H6: There is a Relationship between unpleasant
communication and goals and objectives.

11. Scope of the research
 The research will be carried out in private bank of
Peshawar. The result or findings of the research will be
applicable to not only the banks but also to the other
likewise organizations.

12. Purpose of the research
 The purpose of this research is to investigate whether
compensation strategy effect the employees retention
in the third world country city where the
unemployment rate is in double digits and substitute
is available at even low cost.

13. Objective of the research
 To know the effect of compensation on employees
retention.
 To examine how compensation strategy can effect
employees retention.
 To know the contribution of compensation strategy on
employee retention.

14. Significance of the research
 If compensation has an effect on employees retention
then the management will try to use more and more of
the resources on strategies like this by offering e.g.
Health insurance remuneration and after retirement
benefits etc.

15. Methodology
 Population:
All the private bank of Peshawar
 Sample:
100 employees
 Sampling Technique:
Simple random sampling

16. Methodology
 Data collection:
Observations, Interviews,
Questionnaire.
 Data Analysis:
In Spss correlation will be run.

17. Limitation of the research
 Its results can only be applied to service oriented
organization.
 Time
 Non-cooperative employees.

18. References
 Macro van herpen, m. v. (2003). the effects of
performance measurement and copmensation and
motivation. tinbergen institute , 1-39.
 joana l y ho, a. w. (2002). how change in compensation
plane affect employee performance,recruitment and
retention.

19. Thank you