A Study on the Effect of Total Rewards Strategy on Employee Retention

Abstract

This study investigates the effect of total rewards strategy on employee retention, with particular emphasis on five components: compensation, benefits, recognition, work-life balance, and career growth opportunities. Adopting a quantitative research design, primary data were collected from 119 employees across diverse industries using a structured six-point Likert-scale questionnaire. Data were analyzed using PSPP statistical software through descriptive statistics, reliability analysis (Cronbach's Alpha), Pearson correlation, and multiple regression analysis. Reliability coefficients for all constructs ranged from α = 0.76 to α = 0.90, confirming strong internal consistency. Correlation analysis revealed that all five reward components are positively and significantly associated with employee retention (p < 0.01). Multiple regression results indicate that the overall model is statistically significant (F = 19.40, p < 0.001) and explains 46% of the variance in retention intention (R² = 0.46). Among the predictors, compensation (β = 0.33, p = 0.002) and work-life balance (β = 0.26, p = 0.005) emerged as the most significant determinants of retention. Benefits, recognition, and career growth, though positively correlated, were not statistically significant in the combined model. The findings suggest that organizations should prioritize fair compensation and supportive work-life balance policies to enhance employee retention. These insights carry important implications for HR practitioners and organizational leaders in designing effective, integrated reward systems.