EFFECTS OF COMPENSATION AND BENEFIT PACKAGES ON EMPLOYEE TURNOVER AND JOB SATISFACTION: THE CASE OF WEGAGEN BANK S.C.

Abstract

The purpose of this research was to assess the effects of compensation and benefit package on employees’ turnover and job satisfaction at Wegagen Bank, Addis Ababa, Ethiopia. To achieve this objective, both qualitative and quantitative data were collected from 91 employees who were selected using simple random sampling technique. Questionnaires and interviews were used to collect data from employees of Wegagen Bank working in the Head office. Once the data were collected, they were coded, edited, and analyzed. The major findings indicated that in Wegagen Bank there are different compensation packages such as salary, transport allowance, hardship allowance, telephone allowance, etc. The bank is good at providing annual leave. However, it is weak in the following benefit packages: providing food and beverage to its employee, establishing employee clubs and implementing weak talent management practices, this means the existence of ineffective, redundant and not carrier related training practices. On the other hand, there are different other major problems. Employees do not participate in compensation and benefit decision-making process. Additionally, poor work environment and work culture prevail at the bank. These all may decrease job satisfaction and increase staff turnover. It can then be concluded that most of the respondents were not satisfied with the existing compensation and benefit packages because of the aforementioned reasons. Finally, the all findings lead to the thought that Wegagen Bank S.C. has to review its current compensation and benefit package in order to retain employees for long period of time (decrease turnover) and increase their job satisfaction.