Employee Participation and Employee Retention in View of Compensation

This study determines the relationship between types of employee participation (delegative, consultative, worker director, and worker union) on employee retention and the moderation of employee compensation in this relationship. The authors analyzed four types of employee participation, employee retention, and compensation in two major sectors of Pakistan (n = 1,054): service (n = 535) and manufacturing (n = 519). Self-administered questionnaires were distributed to first-line and middle-level employees. After establishing the reliability and validity of the scale, descriptive statistics, correlation, univariate analysis, multiple regression analysis, and independent-sample t test were conducted. All types of employee participation influence employee retention positively in both sectors. Employee compensation moderated the relationship between types of employee participation and employee retention. Delegative participation had a stronger influence on retention as compared with other types in both sectors. This is the first quantitative study to examine the influence of compensation on the relationship between direct and indirect types of employee participation on employee retention in six industries (Cement, Pharmaceutical, Food and Beverages, Health Care, Banking, and Higher Education) of Pakistan. The authors extend previous research studies by using comparative analysis tools to generalize the results in South Asian organizations.