Influences of Financial and Non-Financial Compensation on Employees’ Turnover Intention in the Energy Sector: The Case of Aramco IPO

Ahmed Alzahrani,Ali Shaddady

doi:10.5539/ibr.v14n6p108

Abstract

The purpose of this research is to identify the effects of financial and non-financial compensation on employees&rsquo; turnover intention at Saudi Aramco after an initial public offering (IPO). A questionnaire was used for collecting data from 142 participants, and a simple linear regression model was used to analyse the survey results. This study revealed that the respondents agree that financial compensation is an important factor in their tendency to continue working at their company and that training is another important factor that motivates them to stay. Further, the results show that financial compensation affects employees&rsquo; turnover intentions, training positively affects their retention at their respective company, and promotion policies correlate with their turnover intentions. The study recommends that companies in the energy sector should give more attention to financial compensation, training, and promotion to motivate employees to remain in their companies. According to the research results, there are positive relationships between retention and continuing in a company based on the independent variables of financial compensation, training, and promotion.

Highlights

IntroductionOne of the major challenges facing any organisation is its ability to recruit and retain talented employees because the decision to add talent can profoundly affect the organisation’s activities and financial path and increase employee turnover (Finnegan, 2010)
One of the major challenges facing any organisation is its ability to recruit and retain talented employees because the decision to add talent can profoundly affect the organisation’s activities and financial path and increase employee turnover (Finnegan, 2010).The total compensation, both financial and non-financial, that the organisation provides to its employees is related to whether it pays less or more than the wages/compensation prevailing in the market and in its sector
3.2 Research Design and Sample Size. This was a quantitative research study that examined the effects of financial compensation and non-financial compensation on employees’ turnover intention in the energy sector

Summary

Introduction

One of the major challenges facing any organisation is its ability to recruit and retain talented employees because the decision to add talent can profoundly affect the organisation’s activities and financial path and increase employee turnover (Finnegan, 2010). The total compensation, both financial and non-financial, that the organisation provides to its employees is related to whether it pays less or more than the wages/compensation prevailing in the market and in its sector. Compensation is related to the type of employees that an organisation attempts to attract, which, in turn, helps to identify the quality of benefits it can offer to its employees. Employees are still eager to receive direct financial compensation

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Discussion

Conclusion