THE RELATIONSHIP BETWEEN COMPENSATION PRACTICES AND EMPLOYEE RETENTION IN MANUFACTURING COMPANY AT SIBU, SARAWAK

The purpose of this study was to study the relationship between compensation practices and employee retention in manufacturing company at Sibu, Sarawak. Data were collected from 31 employees from the manufacturing company in Sibu. The research was fully designed using quantitative research design and close-ended questionnaire was the instrument used to collect data. A five-point Likert scale was used to measure all the items in the questionnaires. Moreover, Statistical Package for the Social Science (SPSS) was used as a tool to interpret and analyze the collected data. The data were analysed using both descriptive and inferential statistics. Descriptive statistics were first reported and it was followed by reliability analysis, normality test, and hypothesis testing using Spearman Correlation. The findings have shown that there is a significant and moderate positive relationship between bonus and employee retention while there is a significant and strong positive relationship between base pay, allowances and fringe benefits with employee retention. The outcome of this research is it acts as a guidelines for organization and HR practitioner to review and understand how to improve and strengthen their compensation policies to enhance employees’ contribution as well as retention. Organization need to be more consciousness and awareness on compensation practices to attract and retain employees with organization for a long period time. In future, researchers also encouraged to conduct similar research through qualitative method, increased sample size and explore more factor that might influence with employee retention to filling up the research ga