EVALUATION OF IMPACT OF COMPENSATION ON EMPLOYEE RETENTION ...

EVALUATION OF IMPACT OF COMPENSATION ON EMPLOYEE RETENTION

IN TATA CONSULTANCY SERVICES LTD. (PUNE)

KUMARI ANKITA JAISWAL

PM & HRD, BIMM, SRI BALAJI UNIVERSITY, PUNE, INDIA.

+919834366780, [email protected]

Wutan Huatan Jisuan Jishu

Volume XVI, Issue XII, December/2020

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ABSTRACT:

In this research study, the impact of compensation using the factors: Base pay structure,

bonus and recognition & rewards, on employee retention has been evaluated; for those who

are currently working in IT department of Tata Consultancy services (TCS) Ltd. which is

situated at Sahyadri Park, S2 building, Rajiv Gandhi Infotech Park, Phase-III, Hinjewadi,

Pune, Maharashtra. Here it has been aimed to find the relationship between compensation and

employee retention, whether compensation will have the significant impact on employee

retention or not. The compensation as independent and the employee retention as dependent

variable have been used for the data collection. By using mixed methodology, questionnaire

has been filled by the employees and interviews has been conducted for them who are

working in IT department of TCS, using simple random sampling for the survey as a target

population. The analysis method used here is correlation, regression, one-way ANOVA and

independent t-test for testing the hypothesis with the use of IBM SPSS software version 25.

The result of this study indicates that the compensation has significant impact on employee

retention in TCS Ltd. The study recommended that TCS can work on their compensation

strategy, offer more attractive salary, create conducive working environment, so as to retain

their experienced and top talented employees and reduce turnover gradually.

KEYWORDS- Compensation, Employee retention, Base pay structure, Bonus, recognition

and rewards



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INTRODUCTION

1.1 Background of the study

Compensation is one of the sources which motivate the employees to keep doing quality

work at certain place. It encourages them to achieve their short term and long-term goals by

attaining the given targets by their organization. In the same way the organization also hold

on to them using compensation as one of the factors to retain them and get the best out of

them which help to maintain their retention rate, attrition rate and reputation at the same time

in the market. It’s a game of give and take.

Employee retention practices help to support an organization's productivity. To increase the

productivity level at its full, the organization chooses their employees based on their

knowledge, skills, qualification and experiences as competencies. So, further it is their

responsibility to retain them because if the employees start to think that the work they are

doing is not worth the pay or compensation as whole they either stop giving their best at work

or simply leave the organization which can affect the organization’s productivity. To avoid

that, organization offers basic pay structure, bonuses, recognition and rewards, and many

other benefits which are competitive with respect to other organizations at par. They always

keep track of their turnover and attrition rate since it helps in setting benchmarks against

competing organization. They use value proposition to decide the salaries so that they avoid

biasness.

Compensation provides a sense of assurity not only to the employee but also to his/her whole

family. Employees follow a set of hierarchy of needs, once they start climbing that ladder



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they don’t want to halt anywhere in between. So, they are always ready to grab the better

opportunity than before either in the same organization or the other. In doing so they

continuously work on themselves, enhance their knowledge, experience and expertise. Their

demands are as important as the organization’s demand from them.

Here, Tata Consultancy Services Ltd. which is situated at Sahyadri Park, S2 building, Rajiv

Gandhi Infotech Park, Phase-III, Hinjewadi, Pune, Maharashtra, has been taken for the study

where only those employees who are currently working in IT department is considered for the

survey. TCS Sahyadri Park is one of the largest development centres in Hinjewadi. The

project is constructed in the three phases, resulting in small vocational township.

The aim of the research is, therefore, to find out whether there is any impact of compensation

on employee retention or not, who are working in the IT department of TCS Ltd. and analyze

the relationship between compensation and employee retention. At the same time, will be

analyzing the relationship between employee retention and gender.

1.2 Problem statement

Compensation is of growing importance to the companies in world over that are seeking to

gain an advantage among competitors as a tool for enhancing higher employee commitment

and retention. Employee compensation offers a diversity of rewards that may be monetary or

non-monetary. When employees found that they are under paid, they likely become ill

motivated, dissatisfied and start to look for a better compensation package in another working

environment. Employees stay in an organization that not only provide knowledge and

experience but also the better direct financial compensation since it is one common cause of



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turnover and indirect financial compensation and non-financial compensation also for their

work. However, due to poor compensation packages (low salary and bonus), they lose

valuable employees and incur a number of costs as a result of employee turnover.

Employee retention has become a very important for the organizations to retain the

knowledgeable and skilled employees. These employees are extremely crucial to the

organization since their value to the organization is essentially intangible and not be easily

replicated (al., 2002)

(M & H, 1998)asserts that, in terms of the new psychological contract, employees have the

right to demand interesting and important work, the freedom and resources to perform it well,

receive pay that reflects their contribution, and to get training and experience needed to be

employable in “this” or another organization. This indicates a “me generation” in which the

egocentricity is the norm. Therefore, there is a need to conduct a profound study to identify

the relationship between the compensation and the employee retention; so, the employees

working in IT department of TCS Ltd. (pune) has been chosen to test the study.

This research is intended to evaluate the impact of compensation on employee retention in

Tata consultancy Ltd. (Pune) and also evaluated the same in relation gender and income

group.

1.3 Objectives of the research

PRIMARY OBJECTIVES:

To analyze the impact of compensation on employee retention

SECONDARY OBJECTIVES:

1. To measure the relationship between compensation and employee retention in

relation gender



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2. To analyze the relationship between compensation and employee retention

based on work experience in TCS

1.4 Null Hypothesis of the research

H1: There is no impact of compensation and employee retention.

H2: There is no significant relationship between compensation and employee

retention in relation to gender.

H3: There is no significant relationship between compensation and employee

retention based on work experience in TCS.

REVIEW OF LITERATURE

2.1 Compensation

(R. F. & F. L, 1981)stated that a good compensation for employees will be able to stimulate

the emergence of fresh ideas and employees’ innovation. With so many ideas from

employees, it would be very useful for the company. With the Social exchange viewpoint

studies cited in(Armstrong, 2009) which found out that employee’s commitment to

organization derives from their perceptions of employers’ commitment to them through

positive beneficial actions directed at the employees by the organization thus establishing

high – quality exchange relationship. Much of the literature estimates the financial cost of

labour turnover of a knowledge worker to be equal to more than a year’s salary(Michaud,

2000). (P. & D.C, 2002)noted that the challenge for every organization and every manager in

the organization is to satisfy each employee’s personal needs. These needs they indicated

included: (1) The need to belong (involvement); (2) The need for recognition (feedback and

rewards); and (3) The need for growth.



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The view supported by(Shah,S.S & Jamsheed,H, 2011) in their study is that, who affirmed

the reward and compensation system is the centre piece of the employment contract, after all

it is the main reason why people work. The objective of any good reward and compensation

are to attract, motivate and retain the good people for the attainment of organizational goals.

But when the reward and compensation system is perceived as unfair, or not equitable and

competitive, it becomes source of dissatisfaction. Herzberg’s two-factor theory (cited in

(Armstrong, 2009) notes that certain factors are necessary to maintain “Hygiene” or ensure

that the employees are not dissatisfied. If a fair and just compensation system is provided, the

employee has the baseline requirement met to ensure that they are now in a position to go for

the higher things like job satisfaction and fulfilment, however if it’s lacking leads to

dissatisfaction. The basic tenets of the two-factor theory provide insight into the areas

managers or employers can influence for instance recognition and rewarding best

performance in order to increase the satisfaction of their employees and thus gain the

commitment and loyalty to organization.

2.2 Retention

(Branch, November 9, 1998)contends that the objective of retention policies should be to

identify and retain committed employees for as long as is profitable both to the organization

and the employee.

Retention devices for individuals: some of the factors seen to contribute to individual

knowledge worker retention are: ensuring employability via ongoing training an

development; performance related pay; increased recognition of individual contribution;

increased communication and involvement; giving work that can be done independently;

giving more freedom; traditional fringe benefits; improving the quality of management;

attending to work/personal life balance; giving challenging work; individual job sculpting;



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encouraging social ties(Mitchell, T.R.,, Holtom,, & B.C. Lee, T.W, 2001); and ensuring

access to leading edge technologies (Kinnear, L. & Sutherland, M, 2000).

(MARGIE SUTHERLAND & WILHELM JORDAAN, 2004)study is about the factors that

affects the retention of knowledge workers. The attrition of knowledge workers has been

viewed as a major cause for concern for the management of organisations. Attracting and

retaining the intellectual capital, a cadre of highly skilled, independent, internationally

marketable and mobile individuals, is a critical feature of globalisation (Paul, 2000).For this

reason, an organisation’s ability to retain knowledge workers is a critical component in

determining its present and the future success. The financial impact of knowledge worker

turnover is under-appreciated by the organizations as the hidden nature of turnover costs,

such as loss of organizational memory, conceals its true magnitude (1998a)

(Michael O. Samuel & Crispen Chipunza, 2009)has focused at the extent to which identified

intrinsic and extrinsic motivational variables influenced the retention and reduction of

employee turnover in both public and private sector organizations. Worldwide, retention of

skilled employees has been of serious concern to the managers in the face of ever-increasing

high rate of employee turnover since it is a world of volatility. Retention is a voluntary move

by an organization to create an environment which engages employees for long term (B, 28

November, 2007)

(Pragalata, 2019)has observed the effect of compensation on employee retention through

work satisfaction and effective commitments as a mediating variable. Here it is mentioned

that the employee retention is the company's ability to retain potential employees owned by

the company to remain loyal to the company. Employee retention refers to the company

policies to prevent employees from leaving the company.



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RESEARCH METHODOLOGY

It consists of Research Design, Data Collection Methods and Data analysis respectively.

3.1 Research method

The method of data collection is the most important aspect of research. The data should be

reliable and accurate since it has a direct impact on the result collected through data analysis,

otherwise, the result of the study will be invalid.

The methodology adopted for measuring the objective of the project was to survey the

employees working in the IT department of TCS Ltd. Sahyadri Park, pune. So, keeping in

view the nature of requirement of the study, structured computer questionnaire was adopted

for collection of primary data. Secondary data has been collected through various online

magazines, articles and previous theses related to my research topic.

3.2 Research design

With the objective to assess the relationship between compensation and employee retention,

quantitative method of data collection has been used.

Correlation, regression and compare means (independent samples t-test) statistics data

analysis method was applied to analyse quantitative data using IBM SPSS version 20.



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3.3 Data collection method and sample size

The data collection has been done through a standardized questionnaire that includes

demographic data and employee’s experience in TCS till yet. The sample was obtained on a

5-point Likert scale from different employees working in the TCS, IT department, Sahyadri

Park, pune. A representative sample of 98; employees were selected from a total population

of 6,000, which is determined by the ratio based on the number of employees of the TCS

under study. To get appropriate sample size, the(Yamane, 1967) formula has been used to

calculate the sample size at 95% confidence level:

𝑛 =N

1 + N(e2)

Where:

n = sample;

N= total population;

(e) = 0.10 or margin of error.

n = 6000/1+6000(0.10) ² = 98.36065574 = 98

Thus, sample size of 98 employees has been selected from the population of 6,000.

3.4 Normality

Normality test checks whether the data roughly fits a bell curve shape before running some

certain statistical tests or regression. For that we can check skewness and kurtosis value,

where, acceptable value ranges from +2 to -2 in case of skewness and in kurtosis from +7 to -

7 (al, 1996).



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(TABLE1)

Above data shows that the values are under the ranges, so we can say that the data are

normally distributed and that the bell-shaped distribution is symmetric about the mean.

3.5 Reliability

Reliability refers to the degree to which the results of the study can be applied to various

measuring conditions, methods and users. Reliability relates to the reputation of Findings of

the research.

Cronbach's alpha coefficient is the most commonly used one, where, when we have multiple

likert questions in a survey/questionnaire that form a scale and then wish to determine, if the

scale is reliable. It is computed to test the internal consistency. A minimum value of 0.70

would be considered acceptable(Nunnally, 1978).

Results:

1. A reliability coefficient of 81.6% was obtained when evaluating the factors of

compensation. So, we can say that the scale was very reliable.

(TABLE2)

2. A reliability coefficient of 82.3% was obtained when evaluating the employee’s

retention. So, we can say that the scale was very reliable.

(TABLE3)

3.6 Data analysis technique



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The data gathered from the respondents (employees) were analyzed in terms of the

objectives of the study already designed. The data collected from respondents through

interviews and questionnaire has been processed; processing implies, editing, coding,

classification and tabulation of collected data so that they are amenable to the

analysis. Then, it was analyzed by using statistical package; IBM SPSS version 20

tool has been applied to analyze data.

DATA ANALYSIS, INTERPRETATION AND HYPOTHESIS TESTING

The analysis of the collected data was performed through Statistical Package for the Social

Science (SPSS) VERSION 20.

Demographic Analysis

1. Gender:

(FIGURE1)

From figure 1, it can be observed that 46 are females and 52 are males out of 98 respondents

(TCS employees). TCS is a famous example of how diversity can be good for business with

having 36.2% female employees overall.

2. Work experience in TCS:

(FIGURE2)



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As shown in figure 2, 63 of the respondents are having work experience in TCS from 5-10

years; 18 of them have work experience from 1-5 years; 17 are from 10-15 years and no one

for more than 15 years in my sample.

Hypothesis Testing

1. Calculation of impact of compensation on employee retention

To check the hypothesis, correlation and regression are used to know the relationship

between compensation using factors- (recognition and rewards, bonus, basic pay structure),

and employee retention.

a. Table 4 shows that Employee retention has a positive correlation with Compensation

since their p value is less than the significant value. According to (Cohen,

1992)correlation of 0.1 has “small” effect, correlation of 0.3 a “medium” effect, and

that a correlation of .5 is a “large” effect. Currently, the effect size using here is: If

correlation varies from 0 to 0.4 it is low, if it is from 0.4-0.7 then moderate, and if

greater than 0.7 it is high. Here, 0.877 is greater than 0.7. Preliminary support for this

hypothesis has been given by the correlation.

(TABLE4)

b. Table 5 shows that how well the data fits into a regression model. The R value here

represents a multiple coefficient of correlation. It is considered to be a measure of

quality of the prediction of the dependent variable. Here the value of 0.877 indicates a

good estimate. R square explains the proportion of variance in dependent variables

(Employee retention) that can be explained by an independent variable



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(compensation). Independent variable explains 76.9% of the variability of the variable

dependent on the pour.

(TABLE5)

c. Table 6 indicates the data's fit for goodness. Where the P value mentioned here as the

significance value is less than 0.05 and the f-value is more than 4, the model explains

the goodness fit for the data.

(TABLE6)

d. Unstandardized coefficient shows that how much dependent variable changes while

all other independent variables are kept constant. Considering the impact on employee

retention, the unstandardized coefficient for compensation is 0.814. This means that

the employee retention improves by 0.814with each unit rise in compensation. Here

compensation and employee retention are statistically significant.

(TABLE7)

Therefore, Hypothesis 1 is rejected because there is an essential relationship between

compensation and employee retention.

2. Calculation of relationship between compensation and employee retention in relation

to gender

• As shown in table 8, in Levene’s test significant value is 0.591 which is more than

0.05, t-value is more than 1.96 and the t-test value is also less than 0.05, therefore

there is homogeneity and it can be inferred that there is a significant relationship

between compensation and employee retention in relation to gender. Therefore, it

rejects Hypothesis 2.



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(TABLE8)

3. Calculation of relationship between compensation and employee retention based on

Work experience in TCS

a. Table 9 shows the descriptive which include mean, standard deviation, 95%

confidence interval for the employee retention for each separate group (1-5 years,

5-10 years, 10-15 years) as well as when all groups are combined (Total).

(TABLE9)

b. As shown in table 10 that the significant value is 0.005 (i.e. p= 0.005), which is

below 0.05 and f-value is more than 4. Therefore, there is statistically significant

difference between compensation and employee retention based on work

experience in TCS.

(TABLE10)

c. The below table shows that there is a significant difference between 1-5 years and

10-15 years.

(TABLE11)

Therefore, Hypothesis 3 is rejected because there is an essential relationship between

compensation and employee retention based on Work experience in TCS.

RESULTS AND DISCUSSIONS- FINDINGS, CONCLUSIONS AND SUGGESTIONS

LIMITATIONS

The survey was conducted only for those employees who are working in TCS (IT

department) currently.



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There are only three components of compensation is used to measure the relationship

between compensation and employee retention i.e. recognition and rewards, bonus

and base pay structure.

Margin of error is 0.10 to collect the sample size and so the responses are only 98

dues to covid-19 pandemic.

There is no data for employees working in TCS for more than 15 years.

FINDINGS AND CONCLUSION

FINDINGS

The research conducted here was to identify if the compensation has impact on employee

retention or not, using three factors- recognition and rewards, bonus, and basic pay structure.

Accordingly, the followings are the major findings from the survey:

The responses collected through questionnaire were from 52 (53.06%) male and 46

(46.93%) female. Moreover, 68.36% of them earn 5,00,000-7,00,000 annually having

5-10 years of experience (64.28%) in their current organization.

Employee’s response regarding current compensation practice reveals, 78.57% of

them feel like they are recognized often or always, 15.3% feel like sometimes, and

6.13% rarely, which shows that there is still room for the improvement.

All the employees are rewarded with gems at the completion of their tasks and

projects.



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The company does not provide bonus based on maintaining regular attendance and

based on performance but at the same time it has the policy of providing payment for

working overtime, all of the employees agreed to that.

52.035% of the respondents are always satisfied with the level of pay they receive that

it matches their job performance and are confident that their pay will raise in the near

future.

In the context of getting opportunities to learn and develop their skills, 58.16% of the

respondents agrees with it but still only 47.98% of them feel like heard and valued in

the organization.

64.28% of the employees are proud to respond that they are treated with dignity by

their respective employers at work and that their workload (42.85%) is also

reasonable.

78.87% of the respondents are sure that they will be in their current organization for

the next 2 years. 21.13% of the respondents are either not sure or are going to switch

their companies.

66.32% are very satisfied with the work culture since they have got supportive co-

workers (70.04%) too.

Each and every employee agreed that they are provided with the proper feedback

mechanism by the company and 80.61% of them believe that they are continuously

receiving the guidance and mentoring.

Large amount of the respondents (52.02%) complete their given task on stipulated

period of time every time, 29.59% almost every time and only very few of them

agreed that they are not able to complete it on time.



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Based on the interviews that have been taken, employees have shared their views on the

compensation structure and what they believe, like:

The shifts are the problem sometimes; it is not very comfortable for everyone.

Less salary (YOY salary rise is 3 to 8%) is provided, usually late Promotions and on-

site.

They do not get anything for maintaining regular attendance as a bonus separately.

Employees’ response regarding the bonus reveals that their payment itself is based on

their performance and that’s why they do not receive any bonus separately.

All of them are rewarded with gems at the completion of their project, but these are

not much of any help since they can only redeem scratch cards or some coupons.

Though most of interviewees think that the work culture is fine, but some of them feel

that they are being biased, the work is not balanced, some will get too much of work

and others will be left with no work at all, but the salary for both of them would be

same, so they don’t feel like giving their hundred percent at work.

Due to covid-19 pandemic, the travelling expenses have been cut from the salary but

instead are provided with the Wi-Fi services.

TCS is a great company for starting anyone’s career. TCS-Maitree is the best part of

TCS especially for co-curricular enthusiast.

TCS-Pune, Sahyadri Park is one of the best campuses found in pune. Every kind of

facilities is available, from gym to basketball court, yoga ground, cafeterias,

recreation zones etc.



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The following are the findings of the study:

There is a significant relationship between compensation and employee retention

in TCS Ltd. as proven through the correlation and regression in the data analysis

which proves that compensation has significant impact on employee retention.

All the criteria have been met to prove that there is a significant relationship

between compensation and employee retention in relation to gender by doing the

independent t-test.

It has been proven that there is significant relationship between compensation and

employee retention based on work experience in TCS.

And so, all the null hypothesis (H1, H2 and H3) has been rejected.

All these variables show that how each of them is inter-connected and that if one thing goes

wrong it affects the others either directly or indirectly.

CONCLUSION

The study tries to find out the impact of compensation on employee retention; here

compensation includes these three factors viz. recognition & rewards, bonus and basic pay

structure. As a result, the feeling of the employees towards the compensation has been

assessed.

The study was conducted on TCS Ltd. (IT department), Sahyadri Park pune. So, based on the

findings, conclusions drawn are that half of the employees think their salary is satisfactory

and is sufficient enough to cop up with the ongoing cost of living. Even though due to covid-

19 pandemic many changes have been made by the company it has still made the employees



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comfortable to work from home and has provided Wi-Fi facilities. As a result, employees

stick to the company. However most of the employees also think that they are not rewarded

well considering their experience and training. Around 4 out of 5 employees feel positive that

they are recognized in TCS. It also shows that the company provides proper feedback

mechanism in addition to guidelines and mentoring. This boosts their moral which can be

seen as to why they want to continue in this company.

Hence, it has been concluded that there is a strong relationship between compensation and

employee retention, and so compensation has a significant impact on employee retention.

RECOMMENDATIONS

Based on the limitations, findings and conclusion, following are the recommendations which

the TCS as well as the employees working in IT department can work on:

Direct financial compensation (salary and bonus) are compensations that employees

give value mostly, and so, are also common causes of employee turnover. According

to Henery, (2007), management must compensate employees adequately. In addition

to pay employees based on their performance, they should give employees incentives

like individual bonus, lump sum bonus, sharing of profits and other benefits. Hence, if

these are put in place they would minimize employee turnover. As observed in the

study that some of the employees are not satisfied with their pay structure so the

company can work on their method to pay their employees based on performance. So,

if TCS (IT department) work on that, this will help not only help them to retain their

experienced employees but also help to attract potential workforce in future.



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The company can give some reward either in form of monetary or non-monetary for

maintaining attendance, it motivates employees which increases productivity also.

Rewards offered by TCS is not enough to cop up with on-going cost of life, so they

can offer better benefits that reward the effort of the employees. And develop

improved compensation strategy, to attract the best candidates who can innovate and

lead the company in the industry, and retain high performance employees.

The company must acknowledge their employees for their best performance, and give

praise and recognition every time they accomplish a task successfully. When

employees receive recognition and appreciation, it confirms their work is valued, and

this increases their satisfaction. On the other hand, recognizing and appreciating the

employees for their good performance will help lower employee turnover at the same

time.

As the employees claim that they properly utilize the resources but still are not feel

like being heard or valued for the same should have a proper track if it’s true or not,

and if it’s true they should be rewarded and at the same time being paid adequately.

That will increase their productivity. And would increase their efficiency while

completing their task.



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References (1998a). Corporate Leadership Council.

al, W. e. (1996).

al., M. e. ( 2002).

Armstrong, M. .. (2009). Armstrong’s handbook of human resource management practice. New York

Kogan page limited.

B, C. (28 November, 2007). A retention checklist: how do you rate? .

www.humanresourcesmagazine.co.au. Accessed.

Branch, S. (November 9, 1998). You hired ‘em. But can you keep ‘em? Fortune Magazine. 101-104.

Cohen. (1992).

Kinnear, L. , & Sutherland, M. (2000). Determinants of organisational commitment amongst

knowledge workers, 31 (3), 106- 112. South African Journal of Business Management.

M, A., & H, M. (1998). Reward management. London: Biddles Ltd.

MARGIE SUTHERLAND , & WILHELM JORDAAN. (2004). FACTORS AFFECTING THE RETENTION OF

KNOWLEDGE WORKERS. SA Journal of Human Resource Management, 2 (2),, 55-64.

Michael O. Samuel, & Crispen Chipunza. (2009). Employee retention and turnover: using

motivational variables as a panacea. African Journal of Business Management, 3(8), 410-415.

Michaud, L. (2000). The value of retaining employees. Agency Sales Magazine, 30 (11), 25-27.

Mitchell, T.R.,, Holtom,, & B.C. Lee, T.W. (2001). How to keep your best employees: developing an

effective retention policy. Academy of Management Executive, 15 (4), 96-107.

Nunnally. (1978).

P. , O., & D.C, K. (2002).

Paul. (2000).

Pragalata, A. T. (2019). The effect of compensation on employee retention through work satisfaction

and effective commitments as a mediating variable, Vol. VII. International Journal of

Economics, Commerce and Management (IJECM); United kingdo.

R. F. , F., & F. L, R. (1981). How and Why Money Matters, Washington, D.C.: The Brookings

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Yamane. (1967).



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FIGURES AND TABLES

Figure 1: Gender distribution

Figure 2: Work experience in TCS

Table 1: Descriptive Statistics

N Minimum Maximum Mean

Std.

Deviation Skewness Kurtosis

Statistic Statistic Statistic Statistic Statistic Statistic

Std.

Error Statistic

Std.

Error

46

52

43

44

45

46

47

48

49

50

51

52

53

female male

No. of

emp

loyee

s

Gender

18

63

17

00

10

20

30

40

50

60

70

1-5 years 5-10 years 10-15 years More than 15 years

No. of

emp

loyee

s

Work experience in TCS



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Employee

Retention

98 2.00 4.33 3.24 .54 -.256 .244 -.683 .483

Compensation 98 1.75 4.17 3.10 .58 -.357 .244 -.766 .483

Valid N

(listwise)

98

Table2:Reliability (compensation)

Cronbach's Alpha N of Items

.816 12

Table 3: Reliability (employee retention)

Cronbach's Alpha N of Items

.823 12

Table 4: Pearson correlation

Employee

Retention Compensation

Employee Retention Pearson Correlation 1 .877**

Sig. (2-tailed) .000

N 98 98

Compensation Pearson Correlation .877**

1

Sig. (2-tailed) .000

N 98 98

**. Correlation is significant at the 0.01 level (2-tailed).

Table 5: Regression (Model summary)

Model R R Square Adjusted R Square

Std. Error of the

Estimate

1 .877a .769 .766 .262

a. Predictors: (Constant), Compensation

Table 3: Regression (ANOVA)

Model Sum of Squares df Mean Square F Sig.

1 Regression 21.913 1 21.913 318.757 .000b



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Residual 6.599 96 .069

Total 28.512 97

a. Dependent Variable: Employee Retention

b. Predictors: (Constant), Compensation

Table 4: Regression (coefficients)

Model

Unstandardized

Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) .711 .144 4.930 .000

Compensation .814 .046 .877 17.854 .000

a. Dependent Variable: Employee Retention

Table 5: Independent t-test

Levene'

s Test

for

Equality

of

Varianc

es t-test for Equality of Means

F

Sig

. t df

Sig.

(2-

taile

d)

Mean

Difference

Std.

Error

Differenc

e

95% Confidence

Interval of the

Difference

Lower Upper

Employees

Retention

Equal

variances

assumed

.29

1

.59

1

2.39

5

96 .019 .2566 .1071 .0439 .4693

Equal

variances

not

assumed

2.39

9

95.13

0

.018 .2566 .1069 .0442 .4689

Table 6: One-way ANOVA (Descriptives)

Employee Retention

N Mean

Std.

Deviation

Std.

Error

95% Confidence

Interval for Mean Minimum Maximum



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Lower

Bound

Upper

Bound

1-5 years 18 3.458 .423 .099 3.247 3.668 2.667 4.167

5-10 years 63 3.112 .557 .070 2.970 3.251 2.000 4.334

10-15 years 17 3.493 .451 .109 3.258 3.722 2.500 4.250

Total 98 3.241 .542 .054 3.131 3.349 2.000 4.334

Table 7: One-way ANOVA (ANOVA)

Employee Retention

Sum of Squares df Mean Square F Sig.

Between Groups 2.969 2 1.484 5.521 .005

Within Groups 25.544 95 .269

Total 28.512 97

Table 8: Tukey post Hoc (multiple comparisons)

Dependent Variable: Employee Retention

Tukey HSD

(I) Work

experience in

TCS

(J) Work

experience in

TCS

Mean

Difference

(I-J) Std. Error Sig.

95% Confidence Interval

Lower

Bound

Upper

Bound

1-5 years 5-10 years .3472* .1385 .037 .0172 .6771

10-15 years -.0318 .1753 .982 -.4494 .3856

5-10 years 1-5 years -.3472* .1385 .037 -.6771 -.0172

10-15 years -.3792* .1417 .024 -.7165 -.0416

10-15 years 1-5 years .0318 .1753 .982 -.3856 .4494

5-10 years .3790* .1417 .024 .0416 .7165

*. The mean difference is significant at the 0.05 level.



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EVALUATION OF IMPACT OF COMPENSATION ON EMPLOYEE RETENTION ...

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