Effects of Fringe Benefits on Employee Loyalty: A Study on University Teachers in Khulna City of Bangladesh

Prosenjit Tarafdar,Sraboni Akter,Kajol Karmoker

doi:10.5430/bmr.v10n3p1

Abstract

The aim of this study was to examine the effects of fringe benefits on employee loyalty in the context of university teachers. The study sample consisted of 100 university teachers who were randomly selected from both private and public universities situated in Khulna city of Bangladesh. Data were collected through a self-administered questionnaire survey. To test the study hypotheses, data were analyzed employing correlation and multiple regression analysis tools. Results of correlation analysis reveal that fringe benefits (insurance & retirement benefits, payments for time not worked, education & development opportunities, flexible working hours, and employee welfare benefits) are positively related to employee loyalty. Regression statistics shows that 25.6% variance of employee loyalty can be explained by the fringe benefits. The study findings also indicate that flexible working hours (β = 0.296, Sig. = 0.001) has the most significant contribution in explaining employee loyalty among the university faculty members employed in Khulna city of Bangladesh.

Highlights

Compensation is essential for retaining the workforce and keeping them motivated
Since fringe benefits work as a stimulator of job satisfaction which is the primary reason for employees in becoming loyal towards the organization, there is a positive relationship between fringe benefits and employee loyalty (Arts, 2010; Ahmad & Scott, 2015)
The main purpose of the study was to investigate the effects of fringe benefits on employee loyalty

Summary

Introduction

Compensation is essential for retaining the workforce and keeping them motivated. Compensation may take the form of financial and non-financial benefits (Michael et al, 2016). The aim of designing employee benefit packages is to offer an attractive compensation package with a view to retaining high-quality employees. Benefits offered by an organization mainly aims at converting employees to pleased employees who become loyal and productive (Ahmad & Scott, 2015). Since fringe benefits work as a stimulator of job satisfaction which is the primary reason for employees in becoming loyal towards the organization, there is a positive relationship between fringe benefits and employee loyalty (Arts, 2010; Ahmad & Scott, 2015). It is well recognized that committed and satisfied employees hardly leave their organization and fringe benefits work as a stimulator of employee satisfaction and commitment

Objectives

Methods

Findings

Conclusion